ISLAMABAD: The Federal Board of Revenue (FBR) will propose “Super Tax” on certain sectors having annual turnover above a certain threshold including the tobacco sector, beverages, steel, edible oil and other sectors in the budget (2022-23).
Sources told Business Recorder that the scope of the Super Tax may be expanded in the coming budget. One of the proposals under consideration is to raise turnover tax under section 113 of the Income Tax Ordinance 2001 on certain sectors or impose ‘Super Tax’ on some sectors with annual turnover above a certain threshold. These sectors would be subjected to the Super Tax or enhanced turnover tax from the next fiscal year.
The first proposal is to increase the turnover tax from 1.25 percent to two percent on certain sectors under section 113 of the Income Tax Ordinance 2001. The FBR may propose to collect “Super Tax” from certain sectors having a specified annual threshold of turnover.
However, the issue is to deal with the problem of splitting of turnover in case certain sectors are subjected to the “Super Tax”.
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Sources said that the government has finally decided to increase taxes on the banking sector. It may be super tax or any other form of tax. Presently, the banking sector is paying four percent Super Tax.
Zero-percent super tax is applicable on person other than a banking company, having income equal to or exceeding Rs 500 million, for the Tax Year 2021 and onwards.
One of the proposals under consideration is to increase the rate of Super Tax on banks.
The potential of tax from the banking sector is much higher compared to the profits earned by the banks.
The proposal to raise taxes on banks would have a positive revenue impact on direct taxes collection next fiscal year.
Copyright Business Recorder, 2022
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