Education expenses: advance tax on persons remitting foreign currency proposed

The Federal Board of Revenue (FBR) has proposed five percent advance tax on persons remitting foreign currency abroad for educational expenses to be collected by banks, financial institutions, foreign exchange companies, according to the Finance Bill (2015) issued here on Friday. Under proposed section 236R (Collection of advance tax on education related expenses remitted abroad) of the Income Tax Ordinance, the rate of collection of tax under section 236R shall be 5 percent of the amount of total education related expenses.
Finance Bill said that there shall be collected advance tax at the rate specified in Division XXIIV of Part-IV of the First Schedule on the amount of education related expenses remitted abroad. Banks, financial institutions, foreign exchange companies or any other person responsible for remitting foreign currency abroad shall collect advance tax from the payer of education related expenses. Tax collected under this section shall be adjustable against the income of the person remitting payment of education related expenses. For the purpose of this section, "education related expenses" includes tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education.
Finance Bill said that the rate of withholding tax for non-filers of returns has been proposed to be increased for contracts by 2.5-3%, supplies by 2%, brokerage and commission by 3%. The FBR has also proposed fix tax of Rs 16,000 on per international air travel passenger for first/executive class and Rs 12,000 per persons on other category excluding economy.
Under Finance Bill, the government has also proposed a huge tax benefit around 180 Billions to service provider companies through Finance Bill (2015-16) and make the income tax deducted under Section 153(1)(b) of the Ordinance as adjustable w.e.f Tax Year 2009. in this regard, Finance Bill (2015-16) proposed amendment in the provisions of Section 153(1)(b) of the Income Tax Ordinance, 2001 to provide huge income tax benefits to corporate sector service providers by making income tax deductable as adjustable for companies with effect from Tax Year 2009, sources added.
When contacted, a tax official told Business Recorder here on Friday that the FBR has proposed to increase customs duty from one to 20 percent on the import of portland cement in budget (2015-16). Customs duty on the import of coal has been proposed to be increased from one to five percent. It is proposed to impose 15 percent customs duty on the import of defence stores. According to the Fifth Schedule of the Customs Act issued by the FBR with budget documents, 15 percent duty would be applicable on Defence stores, excluding those of the National Logistic Cell. This is subject to the condition that if imported by the Federal Government for the use of Defence Services whether the goods have been imported against foreign exchange allocation or otherwise.
The government has imposed 10% custom duty on high speed diesel replacing concessionary duty and regulatory duty. The customs duty of two percent has been imposed on crude oil and motor spirit replacing RD to generate Rs 19 billion. The government has also slapped five percent custom duty on furnace oil by reducing RD to generate Rs 15 billion.