Federal Board of Revenue (FBR) Chairman Asim Ahmad has said additional taxes of Rs200 billion were imposed to achieve the collection target of Rs9,200 billion set in the federal budget for the next fiscal year 2023-24.
Briefing journalists on the amendments to be made to the Finance Bill at the FBR headquarters on Friday, the chairman said Rs175 billion of additional taxes would be collected through direct taxes, while Rs25 billion indirectly.
Ahmad said the information technology (IT) sector exports are a priority to the government. Therefore, he added, general sales tax (GST) on the IT services is being reduced from 15% to 5%.
FBR (Member) Inland Revenue Policy Afaq Ahmed, FBR (Member) Inland Revenue Operation Zubair Amjad Tiwana and FBR (Member) Customs Makram Jah Ansari were also present during the technical briefing.
The officials said withholding tax on the use of debit and credit cards abroad had been increased. Non-filers using debit or credit cards in foreign countries would pay 10% withholding tax, while filers would pay 5% tax.
There was also a proposal for restoring 0.6% withholding tax on non-filers on cash withdrawals from banks. The point-of-sale (POS) retailer tax on branded textiles, leather and sports goods was also being increased from 12% to 15%.
The FBR officials also mentioned about the provisions for a levy of an advance adjustment tax of Rs200,000 per annum on foreign domestic workers; 20% duty on the use of old bulbs; besides a Rs2,000 tax on fans.
Read Govt to collect additional Rs2tr from economy
The officials informed the journalists that the limit on the import of Asian vehicles above 1300cc had been lifted. The budget also imposed a 10% withholding tax on bonus shares, the officials added.
They said by adding more taxes of Rs200 billion, the target reached Rs9,200 billion. By adding mini budget measures, the FBR’s tax revenue target for the next year was Rs900 billion, including Rs22 billion in sales tax and Rs170 billion in income tax.
They said youth would be given business opportunities. The young people under 30 years of age would be exempted from taxes for starting business and they would get a 50% tax exemption on income.
According to the FBR officials, tax exemptions were also being given to the agriculture sector. The agri-based industries in the rural areas would be exempted from taxes for five years.
Exemptions of tax on loans would also be provided to Small and Medium Enterprises (SMEs), the IT and agriculture sectors. Similarly, 5% tax on restaurants, bakeries and digital payments would be waived.
The officials said the requirement of square feet for tax on shops was being relaxed; while 2% tax on purchase of immovable property through remittance was being waived.
The officials also said the remittances limit had been increased from $50,000 to $100,000, while a new Diamond Card was being launched in the Remittance Cards category. The Diamond Card will be issued to those who would remit over $50,000.
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