LAHORE: A number of relief measures have been introduced by the Federal Board of Revenue (FBR) to mitigate the impact of COVID-19, which included an incentive package for the construction industry, promulgation of the COVID-19 Prevention of Smuggling Bill, 2020, speedy clearance of refund claims, and exemption of 61 health sector items from Sales Tax, income tax and customs duty.
According to the official sources, the Tax Laws (Amendments) Ordinance, 2020 was promulgated on 17th April, 2020 encapsulating an incentive package for the construction industry. The same was subsequently incorporated in the Finance Act, 2020 and the Finance Act, 2021. The construction industry in Pakistan was severely impacted due to COVID-19 and initiation of extensive construction activity in the country has contributed significantly towards revival of the national economy by addressing the issue of increased unemployment anticipated in the aftermath of the pandemic, enhancing tax revenues, supporting businesses and propelling economic growth and development.
Similarly, said sources, the COVID-19 Prevention of Smuggling Bill, 2020 was promulgated to curb the menace of smuggling of food and other essential commodities with exemplary punishments to create an effective deterrence in the emergent situation resulting from the outbreak of COVID-19 Pandemic.
They said there was a general understanding in the FBR that there was likelihood that global supply chain of food commodities and essential articles would be affected due to COVID-19 pandemic and the international prices of these items may increase as compared to domestic market; thus creating an incentive for smuggling to other countries. In order to ensure availability of the food commodities and essential articles in the domestic market to all segments of the society, the bill was introduced to adopt measures to mitigate the adverse economic impact of COVID-19 on priority basis. Besides, the existing laws with respect to smuggling of food commodities and essential articles were also strengthened.
In order to facilitate the business community, particularly the export-oriented sectors, the Board has ensured liquidation of genuine tax refunds of all industries. Keeping in view the seriousness of the issue in COVID19 Scenario, FBR issued / adjusted refunds of Rs. 154.7 Billion in first six months of FY 2020-21, which is 105 % higher than PFY as compared to Rs. 75.5 in FY 2019-20. In absolute terms, Rs. 80 Billion more have been paid as refund during period under consideration. The speedy clearance of tax refunds of genuine refunds claimants resolved the liquidity crunch of industries and they were able to pay the salaries to their employees on time.
FBR has also exempted Customs Duties on import of highly essential items including exemption of import of Remdesivir 100mg Injection and injectable solution, oxygen gas/cylinders/cryogenic tanks, and cryogenic tanks (for oxygen gas), by manufacturers of oxygen, from whole of customs duty, additional customs duty and regulatory duty.
Copyright Business Recorder, 2021