ISLAMABAD: Through money whitening scheme and different tax incentives, Prime Minister’s package for industrialists is aimed at promoting investment to the tune of $5 to $10 billion over the medium term.
It basically aimed at allowing informal economy coming into formal sectors of the economy. However, these incentives would not be available to certain sectors for investment purposes such as in arms & ammunition, explosives, fertilizers, sugar, cigarettes, aerated beverages, cement, textile spinning units, flour mills, vegetable, ghee and cooking oil manufacturers, as these sectors either already have excess capacity or are anti-social. Moreover, these incentives will also be not applicable on Funds arising from crimes committed under Narcotic Substances Act 1997, Anti Terrorist Act 1997 and the Anti money Laundering Act 2010.
Senior officials in FBR said that the sluggish economy required a jump-start push to increase investment to GDP ratio which witnessed lowest ebb of the country’s history during the last five years under PPP led dispensation.
“After studying economic situation carefully, we reached to the conclusion that this economy requires incentives to promote investment and it cannot be done without taking domestic investors into the confidence at first stage,” they added.
The government decided to shift the focus towards promoting industrial growth. In order to promote investment in industrial sector, the source of investment shall not be probed by the tax authorities in respect of persons, who set up an industrial undertaking/expansion project on or after the 1st day of January, 2014.
The priority areas include Green Field Industrial Projects, captive power plants established under such projects, low cost housing construction, livestock, and mining and quarrying in Thar coal, Balochistan and Khyber Pakhtunkhwa. Expansion projects shall also be eligible under this scheme.
This facility shall not be available to certain sectors namely arms & ammunition, explosives, fertilizers, sugar, cigarettes, aerated beverages, cement, textile spinning units, flour mills, vegetable, ghee and cooking oil manufacturers, as these sectors are either already have excess capacity or are anti-social.
The facility will also not be available to Funds arising from crimes committed under Narcotic Substances Act 1997, Anti Terrorist Act1997 and the Anti money Laundering Act 2010
In order to promote tax culture and acknowledge leading taxpayers, the Prime Minister announced that top hundred taxpayers in each category of Companies (CEOs), Association of Persons (main shareholders), salaried individuals and non-salaried individuals will be issued Taxpayer’s Privilege Card.
The holders of these cards will be entitled to use at VIP Lounge at airports; fast track clearance at immigration counters; issuance of gratis passport; and increase in baggage allowance from $500 to $2,500.
Excellence Awards shall be given to top ten taxpayers in each category and they shall be invited to annual dinner with the Prime Minister at Excellence Award Ceremonies.
With the aim of enhancing income tax collection and simultaneously facilitating the existing taxpayers by providing an option to the taxpayers to avoid tax audit, the Prime Minister announced immunity from tax audit for those taxpayers who pay twenty five percent more tax for the tax year 2013 than the tax paid or assessed for the previous year.
To facilitate the taxpayers in availing this relaxation the PM announced extension in the date of filing of returns for the current tax year from 30th November to 15th December 2013.
Taxpayers who have already furnished their returns will be eligible to file revised returns to avail the facility.
With the intention to increase the number of return filers, increase tax collection and to reduce the gap between the NTN holders and the return filers, the Prime Minister announced an incentive to encourage NTN holders who have not filed income tax returns during last five years to file their returns by exempting them from penalty, additional tax and audit if they file their missing returns of the last five years.
However, immunity shall be available only if a minimum tax of twenty thousand rupees on the basis of taxable income has been paid.
In order to broaden the tax base, the Prime Minister announced immunity from audit, additional tax and penalty for those individuals who are not in the tax net. To avail this immunity tax on the basis of taxable income should be 25,000 rupees or more.
Immunity from audit shall be available for tax years for which returns have been filed and for subsequent tax years equal to number of returns filed.
Top ten taxpayers in this category will also be provided with Taxpayer’s Privilege Card and will also be entitled to the same privileges as mentioned above.
The provincial governments will be engaged to create ease of doing business by consolidating, rationalizing and minimizing the licensing, registration and inspection regimes.
The recognized trade bodies will be facilitated to avail the facilities associated with setting up of Special Economic Zones by ensuring acquisition of land through provincial governments.
Prime Minister also announced the establishment of Prime Minister’s Business Advisory Council and Agricultural Advisory Council to be comprising members from the business community, agriculturists, civil servants and members of the Cabinet.