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Dar, Bajwa review impact of concessionary regime granted through SROs

Dar, Bajwa review impact of concessionary regime granted through SROs

ISLAMABAD: The actual cost of exemptions is much higher as compared to the tax expenditures. The huge cost of exemptions can only be reduced by withdrawing sales tax and customs duty exemptions.

Sources said that this was the focal point of a meeting chaired by Finance Minister Ishaq Dar at the FBR House to review concessionary regime granted through SROs, notifications and fiscal laws of direct and indirect taxes. The meeting was attended by FBR Chairman Tariq Bajwa, Secretary Finance, Secretary Commerce and senior officials of National Tariff Commission (NTC) and ministries.

Officials reviewed the impact of concessionary SROs and gave their input on the concessionary regime.

Sources said that estimates for cost of exemptions for sales tax are around Rs 242 billion; for customs duty around Rs 161 billion; and for income tax are over Rs 31 billion. Similarly, exemptions and concessions of the excise duty for specific sector is also causing revenue loss.

Under the three-year plan to phase out exemptions, some exemptions may be withdrawn from January 2014. Certain exemptions would be taken away in next federal budget. The remaining exemptions would be taken away in subsequent two fiscal years. However, the plan would be finalised by December 31, 2013 to withdraw unnecessary sales tax concessions and exemptions. The final plan would be presented before the Prime Minister for execution.