Gov't announce measures to facilitate taxpayers, trap evaders

ISLAMABAD: The federal government on Friday proposed a number of measures to provide relief to existing taxpayers and also bring tax evaders into net to facilitate smooth development of various sectors of economy and help achieve higher economic growth in accordance with the country's actual potential.

Finance Minister, Senator Mohammad Ishaq Dar while presenting the federal budget for the fiscal year 2017-18 before the National Assembly proposed different relief and revenue measures in Income Tax, Withholding Tax, Sales Tax, Federal Excise Duty and Customs Duty regimes.

Dar said that the government during past four years continued structural reforms to devise a effective tax system and through Media Term Comprehensive Strategy it wanted to take the tax to GDP ratio up to 15pc.

The Minister said that the Corporate Sector tax, which was being reduced by 1pc percent every year since 2013 would be 30pc percent during the fiscal year 2017-18.

In order to promote Islamic Banking, the tax ratio on its different kinds would be same as is on the conventional banking sector.

He said that for the encouragement of compliant taxpayers, the withholding tax on registration on 850 cc vehicles has been reduced from Rs. 10,000 to Rs. 7,500, on vehicles from 851cc-1000cc, the rate has been reduced from 20,000 to 15,000, on vehicles from 1001-1300 cc, the rate has been reduced from 30,000 to 25,000. However, The rates for non-filers will remain unchanged, Dar added.

He said that there would be no withholding tax on the vehicles purchased under Prime Ministers Youth Loan Scheme.

In order to promote relief on education expenses to low income groups, it was proposed that individuals having taxable income less upto Rs. 1.5 million should be given tax relief equal to 5pc of school fee upto Rs. 60,000 per child per annum, he added.