Tax authorities headed by Federal Board of Revenue (FBR) Chairman Mohammad Jehanzeb Khan discussed proposed incentive package for exporters and investors under the ''Finance Supplementary (Amendment) Bill, 2019'' here at Ministry of Finance on Monday. According to sources, incentive package for exporters and new investments would be announced through the ''Finance Supplementary (Amendment) Bill, 2019.'' The Ministry of Finance has taken input of the Ministry of Commerce and FBR on the proposed incentive packages for exporters and new investment.
Tax managers including FBR chairman and FBR Members held a detailed meeting with the officials of the Finance Ministry. Finance Minister Asad Umar and his team on Saturday last finalised medium-term economic framework of the present government, focusing on measures to bring about reforms in the economy with emphasis on growth in exports and revival of business, as it will be presented in the National Assembly on January 23.
Under the investment and export packages, the government would announce major reduction in cost of raw material for industrial sector. The package would also include measures to simplify the process and procedure, and reduce cost of doing small and medium businesses.
Sources said that the government wants to support the export sector and customs duties on raw material being used by export industries are likely to be reduced in the ''Finance Supplementary (Amendment) Bill, 2019.'' The government may move certain items from lower slab of customs duty to higher slabs under Pakistan Customs Tariff with the possibility to bring certain items from the slab of 10 percent to 15 percent. The Federal Board of Revenue is finalising a list of items to be brought from lower slab to higher slab of customs duty.
The government may provide a major tax relief to the filers of income tax returns by withdrawing withholding tax on cash withdrawal from banks above Rs 50,000 for filers under the ''Finance Supplementary (Amendment) Bill, 2019.''
The proposals under consideration included increase in sales tax on petroleum products, a raise in excise duty on cigarettes and vehicles (1600cc and above), increase in the rate of additional customs duty - from 2 to 3 percent - on imports and further increase in the rate of withholding taxes for non-filers. The government may increase sales tax on domestic supplies of five zero-rated sectors, fix tax regime for commercial/retail businesses to generate additional revenue and increase sales tax to standard 17 percent rate for 1-2 sectors where lower rates or special tax rates are applicable. The government intended to increase the rate of sales tax from 2 to 3 percent on supplies made to un-registered persons.
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