ISLAMABAD: There was no proposal drafted by the Federal Board of Revenue (FBR) at any stage to impose tax on bank deposits of the general public to generate additional revenue under the upcoming mini-budget.
Sources told Business Recorder that there was no such proposal at any stage during the whole process of the drafting of Tax Laws Amendments Ordinance, 2023. There was news in circulation that such kind of proposal was drafted by the government for mini-budget.
However, the flood levy would be replaced with regulatory duties and additional customs duties, sources said.
Non-filers: Govt considering imposing WHT on banking transactions
According to the sources, Tax Laws Amendments Ordinance, 2023 to be promulgated by February 15 to impose additional taxes of Rs 170 billion would include one percent increase in the standard rate of sales tax from 17 percent to 18 percent and withholding tax on banking transactions of non-filers.
The proposal to raise the federal excise duty (FED) on sugary drinks would generate Rs60 billion.
The revenue impact of the proposed withholding tax on banking transactions of non-filers is nearly Rs45 billion.
Sources said that the FBR has worked out the revenue impact of Rs65 billion during Feb-June (2022-23) by increasing the standard rate of one percent sales tax from 17 to 18 percent.
The FBR has also proposed to raise the federal excise duty (FED) on imported and locally-assembled motor vehicles through the promulgation of the Tax Laws Amendment Ordinance to generate additional revenue in ‘mini-budget’. The revenue generation measure under consideration is to rationalise the rates of the FED on imported and locally-assembled motor vehicles.
The FED on cigarettes would also be increased in the coming mini-budget, sources added.
Copyright Business Recorder, 2023
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