FINANCE BUDGET PAKISTAN SUMMARY 2014

budget_summary

Following are the key highlights and summary of the finance budget proposed for the year 2014-2015

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INCOME TAX:

– There are no tax rate changes proposed for Proprietors, Business Individual, Association of Persons (AOPs)and salaried individuals.
– 50% reduction in tax rates for senior citizen has also been proposed for disable/special persons.

– One percent(1%) reduction in tax rate for companies has been proposed.

– Alternate corporate tax @ 17% of accounting profit is proposed for corporate  taxpayers with the facility to carry forward up to ten years for adjustment against  Corporate tax.

– 100% tax credit proposed for NGOs and Non-Profit Organizations.

– Capital Gain tax (CGT) reduction proposed to 12.5% while changing holding period to twelve months.

– Capital gain exemption period proposed to be enhanced to twenty four months.

– Separate withholding tax rates have been proposed for filers and non-filers  resultantly creating extra work load for withholding agents to confirm the status.

– National Tax Number (NTN) is proposed to be a mandatory requirement to obtain industrial and commercial utility connection.

– Advance tax on functions & gatherings is to be reduced to 5% from the existing rate  of 10%.

– Reduction of 1% has been proposed for telephone and mobile users.

– Enhancement in advance tax rates against payment for Supplies, Services, Contracts, Advertising Commission and Brokerage have been proposed.

– The scope of income has been widened to include Bonus Shares and subsequent  5% withholding also proposed.

– On the purchase or transfer of immovable property valuing more than  Rupees Three Million, advance tax has been proposed.

– Rate of initial depreciation on Buildings reduced to 10%.

SALES TAX:

–  Federal Board of Revenue(FBR) has now been  empowered to select the  areas for assessment  of highest retail price of any brand or variety of  products.

– Various SROs are being  transposed to Schedules by amending existing schedules and introducing new  Schedules to the Sales Tax Act, 1990.

– GST rate  on CNG stations enhanced to seventeen percent(17%).

– Retailers will be subject to sales tax of 5 percent in case of monthly electricity bill  upto Rs 20,000 and 7.5 percent in case of monthly electricity bill exceeding Rs  20,000.

– Further tax charged at the rate of 1 percent on supplies made to unregistered  persons is being specifically excluded from the purview of output tax.

– Input tax adjustments restricted only to the extent of goods and services actually  used in manufacturing or sales of the taxable activity.

– Federal Board of Revenue(FBR) have been proposed to be empowered to implement a computerized system for the  purpose of automated scrutiny, analysis and cross-matching of tax returns and other  available information.

–  Specific rates of GST  on mobile phones have been proposed.

FEDERAL EXCISE DUTY:

– The Structure of charge ability of Federal Excise Duty(FED) on cigarettes has been replaced.

–  Federal Excise Duty(FED) on cement sector has been proposed to be charged at the tax rate of five (5) percent applicable on the end retail price.

–  Federal Excise Duty(FED) on international travelling has proposed to be  enhanced to Rs 5,000 for ‘economy and  economy plus'  tickets and Rs 10,000 for ‘club, business and first class' tickets.

–  Federal Excise Duty(FED) on telecommunication services has been proposed to be reduced to 18.5 percent.

–  Telecommunication services which are currently subject to Provincial Sales Tax will not be chargeable  to Federal Excise Duty(FED).

– FED at the rate of sixteen percent(16%) is being levied on chartered flights.

 

CUSTOMS ACT:

– Plant, machinery and equipment imported for fruit  processing and preservation units set up in Gilgit-Baltistan, Baluchistan and  Malakand have been proposed to be exempted for  Customs duty.

–  In order to generate employment opportunities and encourage industry growth, plant, machinery  and equipment imported for setting up industries in FATA exempted from chargeability of  customs duty.

–  Reduced rates of custom duties for specific sectors subject to conditions in newly  inserted Fifth Schedule.

– Substitution of 0% duty slab with 1% custom duty tariff and maximum general tariff  rate of 30% reduced to 25%.

– Revised upward to a uniform rate of 10% custom duty levied on used vehicles,  networking equipment and all kinds of CDs/DVDs.

For  Income Tax calculator  for salaried class year 2014-2015  Click Here

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