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.
