Sunday , December 16 2018
Breaking News
Home / Islamabad / Govt downward revises revenue collection target to Rs4,390b
Govt downward revises revenue collection target to Rs4,390b

Govt downward revises revenue collection target to Rs4,390b

ISLAMABAD: Minister of State for Revenue Hammad Azhar has said that the tax collection target has been lowered by Rs45 billion for the ongoing fiscal year 2018-19.

The previous PML-N government had set the tax collection target for Federal Board of Revenue (FBR) at Rs4,435 billion for the current financial year. However, the PTI government on Tuesday downward revised the target to Rs4,390 billion despite introducing additional taxation measures.

Hammad Azhar informed the media that total revenue impact of the new taxation measures was around Rs178 billion, Meanwhile, the government also proposed a number of relief measures so that the net impact of revenue would be Rs120 billion. Out of Rs178 billion, Rs92 billion are those which were related to enforcement measures including avoiding smuggling, stopping illegal businesses, etc. Giving details about the new tariffs, Azhar said that regulatory duty on 312 tariff lines of luxury items had been proposed while RD on other 295 tariff lines had also been proposed and RD on import of some export-related items had also been proposed to be reduced.

In taxation measures, the government has enhanced the federal excise duty (FED) on cigarettes. The government aimed at generating Rs40 billion through increasing the FED on cigarettes. FED on Tier-1 cigarettes has been enhanced to Rs4500 per 1000 cigarettes from Rs3,970. Similarly, FED on Tier-2 has been increased to Rs1,840 from Rs1,776. On Tier-3, FED has been enhanced to Rs1,250 from Rs854.

Meanwhile, government has proposed to enhance FED on unmanufactured tobacco produced by Green Leaf Threshing (GLT) units from Rs10 per kg to Rs300 per kg. Unmanufactured tobacco can only be sold by registered persons on active taxpayers list. This will ensure better monitoring through keeping trail of supplies.

The government has also withdrawn the requirement of filing return for acquisition of real estate and motor vehicles. The previous government had introduced a new section 227C through the Finance Act, 2018 whereby a bar was placed upon purchase of immovable property of value exceeding Rs5 million in the name of a non-filer. Further, purchase of a new locally manufactured vehicle or first registration of an imported vehicle could not be made in the name of a non-filer whose name was not appearing on the Active Taxpayers List issued by FBR. These restrictions have dampened the economic activity in these two sectors and have posed difficulties for non-resident Pakistani’s thereby negatively impacting the inflow of foreign investment by non-resident Pakistanis in the real estate sector. In order to encourage economic activity in these sectors and to mitigate the hardships being encountered by various persons owing to the restriction on purchase of immovable property (exceeding Rs5 million), purchase and registration of new locally-manufactured motor vehicles and first registration of imported vehicles, section 227C introduced through the Finance Act, 2018 is proposed to be omitted.

The government has also exempted the income donated for the Diamer Bhasha and Mohmand Dam Fund. In view of the imminent need for building of dams various tax concessions have been extended to the Supreme Court of Pakistan – Diamer Bhasha & Mohmand Dam Fund. Exemption has been accorded to any income of Supreme Court of Pakistan – Diamer Bhasha & Mohmand Dams Fund and any amount paid as donation to the Supreme Court of Pakistan – Diamer Bhasha & Mohmand Dams Fund. Moreover, exemption has also been accorded to the aforementioned fund from levy of minimum tax on turnover under section 113 of the ordinance.

Payments received by the fund shall also be exempted from various withholding taxes. Furthermore, any person making donations to the fund shall not be subjected to any inquiry under the Income Tax Ordinance, 2001 with regard to the source of such donations.