Tax relief extended to cars up to 1,000cc, says Tarin

  • Finance minister says mobile phone calls longer than five minutes will now be taxed at Rs0.75
  • Announces reduction in tax rates for REITs and dairy sector
Published June 25, 2021

Finance Minister Shaukat Tarin has said the government will now impose a tax of Rs0.75 on mobile phone calls lasting longer than five minutes, adding that relief extended earlier to cars up to 850cc will now be expanded to vehicles up to 1,000cc as well.

In a session of the National Assembly on Friday, Tarin added income tax exemption on medical expenses will be given back to the salaried class while the tax on the provident fund income of government employees has been withdrawn.

Tax on milk and other dairy products, which was earlier announced to be increased to 17%, has been withdrawn as well, added the finance minister.

Stressing on Real Estate Investment Trusts (REIT), Tarin said, on the recommendation of stakeholders, tax has been reversed from 25% to 15%.

On the topic of oil refineries, he said incentives will be given.

The session, chaired by Deputy Speaker Qasim Suri, comes after the budget announcement earlier this month where Pakistan announced that it will target a growth of 4.8% in the coming fiscal year.

As it looked to strike a balance between growth and rising expenditure, some of the budget measures came under severe criticism including the tax on mobile internet usage.

However, Tarin said the tax on mobile internet usage and SMS has been withdrawn.

Tarin explains IMF challenge

The ex-banker said "harassment" by the Federal Board of Revenue is a problem for all citizens, because of which taxpayers do not file their returns and the country is unable to broaden its income tax net.

He shared that the government has been notified about at least 15 million people who are currently not paying their taxes, reiterating that the FBR will not approach these people directly. Instead, under the government's new plan, a third party will approach non-taxpayers.

Pakistan eyeing sustainable growth, says Tarin

Tarin stated that the government plans to set up a third party with a legal structure, adding that "we will only do an audit and talk to the tax payer", emphasising that the tax payer will not be penalised.


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