Highlights of tax measures proposed in Budget 2018-19

ISLAMABAD: The government has proposed several tax relief measures in its Budget 2018-19 to facilitate the middle income people in the country.

Following are the relief measures introduced in income tax,

-- Increase in threshold of income tax enhanced from Rs. 400,000 to 1,200,000.

-- Tax rates for individuals has been reduced to 15 percent

-- Five tax slabs introduced for all individuals

-- Reduction in corporate tax rates shall be reduced from 13 percent in tax year 2018 to 25 percent in tax year 2023

-- Corporate tax will be 29 percent and to be reduced by 1 percent each year up to 2023

-- Tax on Association of Persons have been reduced to 30 percent

-- Existing 7 slabs of AOPs have been reduced to 6 slabs

-- Tax rate on undistributed profit reduced to 20 percent

-- Applicable rate on accounting profit in case of failure to distribute such dividends being reduced from 7.5 percent to 5 percent

-- Advanced tax on banking transaction of more than Rs 50,000 per day by non-filers  has been reduced to 0.4 percent

-- Withholding tax on issuance of bonus shares has bee withdrawn

-- Limit of tax credit for investment in shares increased from Rs 1.5 million to Rs 2 million

-- Minimum threshold of payment of tax to preclude recovery of tax during pendancy of first appeal has been reduced from 25 percent to 10 percent of the tax payable.

-- Minimum threshold of tax deduction on goods and services has been enhanced threefold.

-- Relief given for taxpayers filing returns in AJK and Gilgit Baltistan

-- 50 percent tax rebate shall be allowed for foreign film makers

-- 50 percent tax reduction in income tax liability allowed to companies driving income from film making

-- Exemption for allowances of armed forces personal

-- Tex rate on the import of coal by manufacturers reduced to 4 percent

-- Advance income tax on credit/debit cards 1 percent from filers and 3 percents from non-filers

-- Withholding tax rates for non-filers has been increased from 12 percent to 14 percent

-- Withholding tax for non-filers companies increased from 12.5 percent to 15 percent

-- Minimum tax collection from marraige halls fixed at 5 percent of bill or Rs 20,000 per function in major cities, Rs 10,000 per function in remaining cities

-- Tax on dealers margin of a petrol pump operator be collected on ex-deport sale price of HSD at rate 0.5 percent from filers, 1 percent from non-filers

-- For promotion of exports, Custom Duty (CD) on raw materials and inputs have been withdrawn

-- Reduction of CD on multi-ply and allumunium foil from 20 percent to 18 percent

-- Reduction of CD on finished rooms from 20 percent to 10 percent

-- Withdrawal of 11 percent CD on acrylic tow

-- Zero rating on import of potato is being granted retrospectively on 200,000 metric tons imported during period May 5, 2014 to July 31 2014

-- Reduced rate of sales tax at 5 percent is being introduced on import of 19 times of cinematographic equipment.