AIRLINK 74.85 Increased By ▲ 0.56 (0.75%)
BOP 4.98 Increased By ▲ 0.03 (0.61%)
CNERGY 4.49 Increased By ▲ 0.12 (2.75%)
DFML 40.00 Increased By ▲ 1.20 (3.09%)
DGKC 86.35 Increased By ▲ 1.53 (1.8%)
FCCL 21.36 Increased By ▲ 0.15 (0.71%)
FFBL 33.85 Decreased By ▼ -0.27 (-0.79%)
FFL 9.72 Increased By ▲ 0.02 (0.21%)
GGL 10.45 Increased By ▲ 0.03 (0.29%)
HBL 112.74 Decreased By ▼ -0.26 (-0.23%)
HUBC 137.44 Increased By ▲ 1.24 (0.91%)
HUMNL 11.42 Decreased By ▼ -0.48 (-4.03%)
KEL 5.28 Increased By ▲ 0.57 (12.1%)
KOSM 4.63 Increased By ▲ 0.19 (4.28%)
MLCF 37.80 Increased By ▲ 0.15 (0.4%)
OGDC 139.50 Increased By ▲ 3.30 (2.42%)
PAEL 25.61 Increased By ▲ 0.51 (2.03%)
PIAA 20.68 Increased By ▲ 1.44 (7.48%)
PIBTL 6.80 Increased By ▲ 0.09 (1.34%)
PPL 122.20 Increased By ▲ 0.10 (0.08%)
PRL 26.58 Decreased By ▼ -0.07 (-0.26%)
PTC 14.05 Increased By ▲ 0.12 (0.86%)
SEARL 58.98 Increased By ▲ 1.76 (3.08%)
SNGP 68.95 Increased By ▲ 1.35 (2%)
SSGC 10.30 Increased By ▲ 0.05 (0.49%)
TELE 8.38 Decreased By ▼ -0.02 (-0.24%)
TPLP 11.06 Decreased By ▼ -0.07 (-0.63%)
TRG 64.19 Increased By ▲ 1.38 (2.2%)
UNITY 26.55 Increased By ▲ 0.05 (0.19%)
WTL 1.45 Increased By ▲ 0.10 (7.41%)
BR100 7,841 Increased By 30.9 (0.4%)
BR30 25,465 Increased By 315.4 (1.25%)
KSE100 75,114 Increased By 157.8 (0.21%)
KSE30 24,114 Increased By 30.8 (0.13%)
Print Print 2023-01-18

New tax raising steps under consideration

  • Proposed measures include increase in rates of withholding taxes, more indirect taxation, three percent flood levy on imports, and tax on banks’ foreign exchange income
Published January 18, 2023

ISLAMABAD: The proposed revenue measures to be taken through the Presidential Ordinance may include an increase in the rates of withholding taxes, more indirect taxation, three percent flood levy on imports, and tax on banks’ foreign exchange income.

Sources told Business Recorder on Tuesday that the additional revenue measures would mostly cover indirect taxes and increasing rates of withholding taxes (WHT). The three percent flood levy could generate additional revenue of Rs60 billion. The government is also considering imposing tax on banks’ foreign exchange income.

Some other proposals under examination are to increase taxes on sugary beverages and tobacco, and the rate of withholding taxes may be enhanced on property transactions.

Another proposal is to raise the capital value tax rates on imported and locally-assembled vehicles. In this connection, the revenue impact of different withholding taxes is under consideration.

Rs550bn tax gap largely falls in five sectors: FBR

The initial draft of the Presidential Ordinance has been prepared incorporating proposals of three percent flood levy on imports and tax on banks’ foreign exchange income. However, there is no further development on the said ordinance.

According to the sources, the FBR has repeatedly requested the government to impose 17 percent sales tax on petroleum products to generate additional revenue equivalent to the amount of projected revenue of Rs60 billion through the promulgation of the Ordinance. The FBR can easily impose sales tax through a notification.

However, the FBR has been unable to get the approval of Finance Minister Ishaq Dar to impose sales tax on petroleum products.

In November 2022, the Economic Coordination Committee (ECC) of the Cabinet had deferred the Federal Board of Revenue (FBR)’s proposal seeking the imposition of 17 percent sales tax on High Octane Blending Component (HOBC) and RON-97.

The FBR has estimated to collect Rs7,300 billion by the end of 2022-23 against the assigned target of Rs7,470 billion for the ongoing fiscal year.

The customs duty collection witnessed a major decrease during the first half (July-December) of 2022-23 due to the import compression. The FBR’s Inland Revenue has estimated that they would be able to achieve the assigned tax collection target in the second half (Jan-June) period of the current fiscal year, so the income tax, sales tax and federal excise duty (FED) related targets would remain intact.

Copyright Business Recorder, 2023


Comments are closed.

Khan Jan 18, 2023 11:18am
Indirect taxes will not work. People must be taxed on the basis of income. Direct taxation is needed to support a civilized society.
thumb_up Recommended (0)
Retired Jan 18, 2023 11:40am
Government is choking the economy. All indicators point to a decelerating economic output. Current measures of restricted import will lead to lesser revenue for businesses and hence less tax collection. The government's solution to this? Further tax hikes .. We are in a death spiral!
thumb_up Recommended (0)
KU Jan 18, 2023 11:58am
These steps are piecemeal measures only, the businessmen community needs to voice their concerns now and put pressure on the government to stabilize the economy. Decisions to levy taxes and raise electricity and gas rates may be essential, but why isn't raising salaries or daily wages part of the decision? Also, theft of electricity and gas, and whatnot, is rampant, and no one is willing to stop this. Hopefully, the incompetence of our politicians has become apparent to the masses so they will now choose them carefully in the future.
thumb_up Recommended (0)
Muhammed Jan 18, 2023 12:24pm
Why not impose hefty non adjustable annual income tax on luxury vehicles. Slab wise tax be imposed for eg. rs 120,000/- p. a. on a 1600 cc vehicle, Rs 240,000/- p a on 2000 cc so on so forth. Rs one million & upward be imposed on bullet proof vehicles.
thumb_up Recommended (0)
Saleem Munshi Jan 18, 2023 12:33pm
Do our Security Institutions from police upwards pay their energy and gas bills?
thumb_up Recommended (0)
Ahmed Jan 18, 2023 01:06pm
Put on Hold Pakistan government Employees salary increase for next 3 years. Frerze alll perks like 300 petrol allowances for next 3 years. Highest grade to be reached to Grade 19. Eliminate all grades above 19. Reduce salaries by 10 percent of government employees includes Armed Forces. No 4 Star General just 3 Stsr is enough. Reduce armed forces strength
thumb_up Recommended (0)
Janbaaz Jan 18, 2023 01:46pm
@Ahmed , How dare you speak against the army?! Our soldiers lay down their lives for the motherland, and you have the audacity to suggest 10 percent reduction in their salaries? Why don't you go to the border and man the post there instead of suggesting ludicrous ideas, you rotten civilian!
thumb_up Recommended (0)
Abdul Rehman Jan 18, 2023 02:29pm
No business, no import permission for even Raw materials. Imposing ST on already closed automobile industry will yield nothing. Only geniuses like Dar and FBR can imagine collection of tax by increasing rates.
thumb_up Recommended (0)
Muhammad Kashif Jan 18, 2023 02:41pm
Under the situation in Pakistan, the more you tax the more you degrade your economy. The further taxation will lead the economy of Pakistan to more tax evasion. This further taxation is NOT the answer of the economy. The huge size of pension has become PENSION BOMB. We need to defuse this bomb by rationalizing the size of pensions. There is a great deal of GHOST government servants who are receiving their salaries at home without doing their jobs. But the government is appeasing these ghost servants instead firing them from the jobs. Why do we pay taxes whereas we are receiving NOTHING against these taxes? On one hand, we are paying utility bills, but on the other hand, we are COMPELLED to arrange their own water, electricity and gas.
thumb_up Recommended (0)
Usman Rashid Jan 18, 2023 05:45pm
@Ahmed , I think you really needed to workout the current salaralies of Armed forces. They are paying taxes on their salaries as well as all indirect taxes and even WHT. Its difficult for Armed forces persons to run home affairs. They have the lowest pay scales in all Govt institutions. Only 30 lack people are paying income tax, out of which 7 lack are from Armed forces and Civ Armed Forces. Total population is 220 Mn. At least 100 Mn are capable to pay income taxes.
thumb_up Recommended (0)
Rizwan Jan 18, 2023 08:47pm
@Janbaaz, every civilized person should mind their language and not call names to each other. Give Respect to receive it.
thumb_up Recommended (0)
M Jan 18, 2023 09:07pm
Why not cut down perks and extravagant allowances of all governmental employees across the board and tax high agricultural incomes.
thumb_up Recommended (0)