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pk/en/tax-memorandum
This memorandum gives a brief overview of Pakistan economy and significant amendments
proposed by the Finance Bill 2019. All changes proposed through the Finance Bill 2019, subject
to approval by National Assembly and Presidential assent, are effective July 1, 2019.
Certain amendments will be effective on the next day of assent given by the President to these
provisions.
Economic Overview 1
Income Tax 5
Sales Tax 20
Customs Duty 28
Other Laws 31
BUDGET AT GLANCE
Budget Financials
2018-2019
2019-2020
(Revised)
Rs in Rs in
Billion % Billion %
Expenditure
- Current expenditure 7,473 107 5,794 109
- Development expenditure 949 14 830 16
8,422 121 6,624 125
IN
12% 3%
9%
17%
18%
7%
Borrowings
Receipts
39%
18% 67%
10%
1%
5%
OUT
14%
28%
13%
8%
34%
Federal Excise
Duty
6%
Sales Tax
36%
Customs Duties
17%
5
INCOME TAX
SPECIAL PROVISIONS FOR PERSONS It is also proposed that a person can be included in the
NOT APPEARING ON ACTIVE list of ATL even on filing of return after the due date, if
he pays surcharge at applicable rates.
TAXPAYERS LIST
Persons not appearing in the ATL will not be issued
Through Finance Act, 2014, a concept of ‘filer’ refund during the period when the person is not in
and ‘non-filer’ was introduced whereby a list of ATL. Furthermore, such person will also not be entitled
‘filers’ was issued by the Federal Board of to additional payment for delayed refund and the
Revenue (FBR) from time to time to include such period when he was not included in ATL shall be
taxpayers who have filed their returns for latest excluded for computation of period for such purposes.
tax year. Enhanced withholding tax rates were
prescribed for ‘non-filers’ besides certain special Withholding tax provisions covered by Tenth
Schedule
withholding tax provisions which were only
applicable on ‘non-filers’. The special provisions of Tenth Schedule are applicable
on following withholding tax provisions:
The Finance Bill proposes to do away with the
concept of ‘filer’ and ‘non-filer’ and instead Section
Nature of payment
introduces provisions to deal with such persons Reference
whose names do not appear on Active Taxpayers 37A Capital gains on disposal of securities
List (ATL). As a result of such special 148 Imports
provisions, the effect shall be as under: 148A Tax on local purchase of cooking oil or
vegetable ghee by certain persons
a) The rate of withholding tax for certain 150 Dividends
provisions, which currently prescribe an 150A Return on investment in Sukuks
increased rate for non-filers, is proposed to 151 Profit on debt
be enhanced by 100% for persons not 152 Certain payments to non-residents
appearing on ATL with procedure for 152A Payments for foreign produced
provisional assessment and penalty commercials
proceedings if such persons fail to file 153 Payments for goods, services and contracts
return of income for respective tax year. On 153B Payment of royalty to resident persons
filing of returns, the taxpayers are entitled 156 Prizes and winnings
to claim refund of withholding tax in 156A Petroleum products
excess of their tax liability. These provisions 231B Advance tax on private motor vehicles
are contained in the Tenth Schedule. 233 Brokerage and commission
233A Collection of tax by a stock exchange
b) Following tax withholding provisions remain registered in Pakistan
outside the ambit of Tenth Schedule having 234 Tax on motor vehicles
been already applicable on persons not 234A CNG Stations
appearing in ATL (currently termed as non- 236 Telephone and internet users
filers): 236A Advance tax at the time of sale by auction
236C Advance tax on sale or transfer of
immovable property
Section 236G Advance tax on sales to distributors, dealers
Nature of payment
Reference and wholesalers
231A Cash withdrawal from a bank 236H Advance tax on sales to retailers
236HA Tax on sale of certain petroleum products
231AA Advance tax on transactions in Bank
236K Advance tax on purchase or transfer of
236P Advance tax on banking transactions
immovable property
otherwise than through cash
236S Dividend in specie
236U Advance tax on insurance premium
236Y Advance tax on persons remitting abroad
236V Advance tax on extraction of minerals through credit, debit or prepaid cards
6
Mechanism for obtaining exemption The Bill also proposes a flat advance tax at the
certificate rate of 1% of the fair market of immovable
property to be collected at the time of registering,
A procedure has been prescribed whereby recording or attesting its transfer, as against the
a person not on ATL can be excluded from existing rates which range from 0% to 2% based
enhanced withholding provisions by an order of on the value of immovable property.
the Commissioner. The procedure is similar to
the one prescribed for payments to non-residents PURCHASE OF ASSETS THROUGH
with an exception that in this case, failure to pass BANKING CHANNEL
an order within thirty days will result in a deemed
order accepting the application. The Bill proposes an overriding provision to
restrict purchase of following assets by any
person otherwise than by a crossed cheque drawn
TAX REGIME FOR DISPOSAL OF on a bank or through crossed demand draft or
IMMOVABLE PROPERTIES crossed pay order or any other crossed banking
instrument showing transfer of the amount from
Taxation of gains arising on disposal of one bank account to another bank account:-
immovable properties is proposed to be
revamped. a) Immovable property having fair market
value greater than Rs 5 million; or
As against the current uniform basis of taxation
of all types of immovable properties, the Bill b) Any other asset having fair market value
proposes to introduce the following: more than Rs 1 million.
a) Gains arising on disposal of open plots as In case the transaction is not undertaken in the
well as constructed properties are above manner, such asset shall not be eligible for
proposed to be taxed at normal rates any depreciation or amortisation allowance and
where the holding period is upto 1 year. no related cost shall be allowed for computing any
taxable gain on such transaction.
b) For open plots:
- if the holding period exceeds 1 year Furthermore, where persons fail to comply with
but does not exceed 10 years, the gain the above provisions with regard to immovable
chargeable to tax will be reduced by properties, penalty at the rate of 5% has also been
25% and taxed at normal rate; and proposed. The proposed penalty will be
computed on the basis of value as determined by
- if the holding period exceeds 10 the FBR or on the basis of stamp duty value,
years, gain will be taken as zero. whichever is higher.
FINAL TAX REPLACED WITH MINIMUM Where such supplies are made under a dealership
TAX agreement with the dealers who are not
registered under Sales Tax Act, 1990 and are not
Presumptive / final tax regime was introduced appearing in the ATL under the Income Tax
in the year 1992 whereby the concept of Ordinance, 2001; an amount equal to 75% of the
income based taxation was shifted to transaction dealer’s margin will be considered as deemed
based taxation. Since then, the scope of final tax income of the supplier. For the purpose of this
regime was extended to a number of transactions. provision, 10% of the sale price of the
There has been a realisation that this regime was manufacturer has to be treated as dealer’s
effectively contributing in a negative manner margin.
resulting in non-documentation of economy and
resulting in indirect taxation, which was
regressive in nature. In the last Finance Act, INTER-CORPORATE DIVIDEND IN
2018, an attempt was made to exclude GROUP COMPANIES
commercial importers from the purview of final
tax, however, the same were again brought back In the Finance Supplementary (Second
to the final tax regime through Finance Amendment) Act, 2019, a partial exemption
Supplementary (Second Amendment) Act, 2019. regime was reinstated for inter corporate
dividend in case of companies availing group
The Bill proposes to replace final tax with relief. Resultantly, the exemption was available
minimum tax in all cases other than exports, only:
prizes and winnings and sellers of petroleum
products. As a result of this amendment, it is (i) where there is a surrender of losses in that
expected that there will be an improvement in Tax Year; and
documentation of economy as the taxpayers will
be required to declare their income under Net (ii) to the extent of percentage holding of
Income Basis based on their books of account. parent company in the subsidiary
company.
(c) With effect from tax year 2020 and onward, The Bill now proposes certain amendments to
reversal of ‘bad debts’ classified as ‘loss’ address the practical issues which were being
shall be taxable to the extent of such faced by withholding agents of such contractors
provisions allowed. in relation to payments for offshore portion of the
contract which were otherwise not taxable in
Currently, the bad debts which are classified as Pakistan. Under the proposed amendment, in
‘sub-standard’ under the Prudential Regulations case of payment that constitutes part of an overall
of State Bank of Pakistan are not allowed until the arrangement of a cohesive business operation, on
same are reclassified as ‘doubtful’. Henceforth, an application made by the payer, the
bad debts classified as ‘doubtful’ are also Commissioner may allow the person to make
not allowed and the deduction shall be allowed payment after deduction of tax equal to 30% of
only to the extent of ‘loss’. tax chargeable on such payment under section
152(2) viz. 20%. The effective tax rate would thus
For tax years 2020 and onwards, the taxable be 6%. The credit of such tax will be available to
income arising from additional income earned the Permanent Establishment of the non-resident
from additional investments in Federal person accounting for profits arising on the
Government securities is proposed to be taxed at overall cohesive business operation.
the rate of 37.5% instead of existing rate of 35%. It appears that the reference to sub-section (2) in
The amount of additional income and additional the above proposed provision is an inadvertent
investments shall be determined on the basis of error as the said sub-section is a residuary
certificate from external auditor to be furnished provision dealing with such payments which are
by the banks, along with accounts, while e-filing not dealt in other provisions whereas the
return of income. payments under such contracts are covered by
sub-section (1A)(a).
INCREASE IN RATE OF TAX /
CORPORATE TAX
WITHHOLDING ON DIVIDEND
Under the existing provisions of law, there is Applicable tax rate including collection of
a reduction in tax rate of 1% for each successive advance tax on dividend distributed by purchaser
tax year up to tax year 2023. The bill proposes of power project privatized by WAPDA or on
corporate rate of tax to be fixed at 29% for shares of company set up for power generation or
tax year 2019 and onwards. share of company supplying coal exclusively to
the power generation projects is proposed to be
enhanced from 7.5% to 15%.
9
Sr
Taxable income Rate
No.
1. Where the taxable income does not exceed Rs 600,000 0%
2. Where the taxable income exceeds Rs 600,000 but does 5% of the amount
not exceed Rs 1,200,000 exceeding Rs 600,000
3. Where the taxable income exceeds Rs 1,200,000 but Rs 30,000 + 10% of the amount
does not exceed Rs 1,800,000 exceeding Rs 1,200,000
4. Where the taxable income exceeds Rs 1,800,000 but Rs 90,000 + 15% of the amount
does not exceed Rs 2,500,000 exceeding Rs 1,800,000
5. Where the taxable income exceeds Rs 2,500,000 but Rs 195,000 + 17.5% of the amount
does not exceed Rs 3,500,000 exceeding Rs 2,500,000
6. Where the taxable income exceeds Rs 3,500,000 but Rs 370,000 + 20% of the amount
does not exceed Rs 5,000,000 exceeding Rs 3,500,000
7. Where the taxable income exceeds Rs 5,000,000 but Rs 670,000 + 22.5% of the amount
does not exceed Rs 8,000,000 exceeding Rs 5,000,000
8. Where the taxable income exceeds Rs 8,000,000 but Rs 1,345,000 + 25% of the amount
does not exceed Rs 12,000,000 exceeding Rs 8,000,000
9. Where the taxable income exceeds Rs 12,000,000 but Rs 2,345,000 + 27.5% of the amount
does not exceed Rs 30,000,000 exceeding Rs 12,000,000
10. Where the taxable income exceeds Rs 30,000,000 but Rs 7,295,000 + 30% of the amount
does not exceed Rs 50,000,000 exceeding Rs 30,000,000
11. Where the taxable income exceeds Rs 50,000,000 but Rs 13,295,000 + 32.5% of the amount
does not exceed Rs 75,000,000 exceeding Rs 50,000,000
12. Where the taxable income exceeds Rs 75,000,000 Rs 21,420,000 + 35% of the amount
exceeding Rs 75,000,000
Sr
Taxable income Rate
No.
1. Where the taxable income does not exceed Rs 400,000 0%
2. Where the taxable income exceeds Rs 400,000 but 5% of the amount
does not exceed Rs 600,000 exceeding Rs 400,000
3. Where the taxable income exceeds Rs 600,000 but Rs 10,000 + 10% of the amount
does not exceed Rs 1,200,000 exceeding Rs 600,000
4. Where the taxable income exceeds Rs 1,200,000 but Rs 70,000 + 15% of the amount
does not exceed Rs 2,400,000 exceeding Rs 1,200,000
5. Where the taxable income exceeds Rs 2,400,000 but Rs 250,000 + 20% of the amount
does not exceed Rs 3,000,000 exceeding Rs 2,400,000
6. Where the taxable income exceeds Rs 3,000,000 but Rs 370,000 + 25% of the amount
does not exceed Rs 4,000,000 exceeding Rs 3,000,000
7. Where the taxable income exceeds Rs 4,000,000 but Rs 620,000 + 30% of the amount
does not exceed Rs 6,000,000 exceeding Rs 4,000,000
8. Where the taxable income exceeds Rs 6,000,000 Rs 1,220,000 + 35% of the amount
exceeding Rs 6,000,000
12
400,000 - - -
600,000 1,000 10,000 9,000
1,200,000 2,000 70,000 68,000
2,400,000 60,000 250,000 190,000
3,000,000 150,000 370,000 220,000
4,000,000 350,000 620,000 270,000
5,000,000 600,000 920,000 320,000
6,000,000 890,000 1,220,000 330,000
> 6,000,000 Rs 600,000 + 29% Rs 1,220,000 +
of the amount 35% of the amount
exceeding exceeding
Rs 5,000,000 Rs 6,000,000
13
The rate of tax for profit on debt derived by Currently, an individual is resident in a tax year
resident taxpayers other than companies is subject to the only condition that his stay in
proposed to be enhanced as under: Pakistan should be more than 182 days. The Bill
now proposes to re-instate the position that
Rate of tax existed prior to 2003 whereby if an individual is
Slab
Existing Proposed present in Pakistan for 90 days in any one tax
Where profit on debt does not year and in aggregate 365 days in four preceding
exceed Rs.5,000,000 10% 15% years, he will also be considered as resident.
Where profit on debt exceeds
Rs.5,000,000 but does not
exceed Rs.25,000,000 12.5% 17.5% PENALTY AND PROSECUTION FOR
Where profit on debt exceeds OFFSHORE ASSETS
Rs.25,000,000 but does not
exceed Rs. 36,000,000 15% 20%
After the revelation of Panama Leaks and
voluminous undeclared offshore assets, certain
Accordingly, it is proposed that profit on debt amendments were made through Finance Act,
exceeding Rs. 36 million be taxable under normal 2018 to eliminate the benefit otherwise available
tax regime at the applicable slab rate. under the time barred provisions relating to
undeclared assets. In the same context, through
Furthermore, the rate of tax withholding is the Finance Supplementary (Second
proposed to be increased from 10% to 15% in Amendment) Act, 2019; the concept of
all cases except where profit paid does not exceed provisional assessment was introduced for those
Rs. 500,000. cases in which offshore assets are discovered by
relevant authorities.
TAX CREDIT TO A FULL TIME TEACHER The Bill now proposes further strict measures to
deal with such offshore assets in the form of
penalties and prosecution which are also
Presently, a full time teacher or a researcher intended to include enablers / advisors.
employed in a non-profit education or research Furthermore, provisions are being proposed for
institution, duly recognized by Higher Education freezing domestic assets of persons involved in
Commission, a Board of Education or a offshore tax evasion who are likely to leave
University recognized by the Higher Education Pakistan or about to dispose of such offshore
Commission, including government training and assets.
research institution, is allowed a tax credit equal
to 40% of tax payable on his / her income from It is proposed to impose penalties in respect of
salary. It is now proposed to reduce the tax credit the following offences:
to 25%.
Offences Penalty
Further, it is proposed that the tax credit shall not Offshore tax evader involved in Rs. 100,000 or 200%
be available to a full time teacher or researcher of offshore tax evasion in the course of tax evaded,
a government training institution and to the of any proceedings. whichever is higher.
Assisting a person in offshore tax Rs. 300,000 or
teachers of medical profession who derive income evasion in the course of any 200% of tax evaded,
from private medical practice or who receive proceedings under this whichever is higher.
share of consideration from patients. Ordinance.
Person involved in asset move Rs. 100,000 or 100%
from a specified territory to an of tax, whichever is
un-specified territory. The higher.
unspecified territory is defined as
the one which does not have an
Exchange of Information
Agreement.
14
For the purpose of computation of super tax, the Currently, gifts are taxable in the hands of
adjustment of brought forward depreciation and recipient if the same are received otherwise than
brought forward business losses are proposed to by a crossed cheque or through a banking channel
be excluded in case of Banking Companies, from a person not holding National Tax Number.
Insurance Companies and Oil and Mineral This provision is understood to deem as income
Exploration companies. Through Finance Act, those monetary gifts which are received
2016, similar amendment was also made for otherwise than through the aforesaid manner.
other persons. The amendment is aimed to nullify The Bill seeks to enlarge the scope of such
the effect of certain decisions of Appellate deemed income to non-monetary gifts not
Tribunal whereby it was held that adjustment for received from grandparents, parents, spouse, real
such losses to these specific persons could not be brother, real sister, son or a daughter. However,
denied for computation of super tax liability. it is considered that in order to give full effect to
the intention behind the proposed enlargement,
the draft provision needs some modifications.
INTANGIBLES
The Bill proposes to introduce following two TAX CREDIT FOR PERSONS EMPLOYING
changes in the provisions relating to intangibles, FRESH GRADUATES
including amortisation thereof:-
A person employing freshly qualified graduates
from a university or institution recognised by
(a) Where an intangible does not have an Higher Education Commission is proposed to be
ascertainable useful life, the amortisation allowed a tax credit on average rate of tax in the
will be allowed over a period of following manner:
25 years as against presently provided
period of 10 years; and (a) The tax credit will be computed on the basis
of annual salary paid to the freshly qualified
graduates not exceeding 15% of the total
(b) Self-generated goodwill or any employees in the tax year and 5% of the
adjustment arising on account of person’s taxable income for the year,
accounting treatment will not be whichever is lower;
considered as intangible and henceforth,
no amortization will be allowed in (b) The tax credit is allowed in respect of persons
respect thereto. This amendment aims who have graduated after July 1, 2017 from
to cover cases involving business aforesaid institutions.
acquisitions, mergers, reorganisations,
etc. The proposed provision authorizes The above proposal envisages that the aforesaid
FBR to notify Rules in this regard. tax credit will be available in addition to
This proposed amendment apparently deduction of salary expenditure allowed under
seeks to reverse the impact of decisions general provisions relating to admissible
of High Courts where amortization of business expenditure.
goodwill was allowed.
The salient features released with the budget
documents provide that where this credit is not
absorbed against the tax liability for the
particular tax year, the same can be carried
forward for adjustment against tax payable of
subsequent five tax years. However, the Finance
Bill does not contain an enabling provision in this
regard.
16
TAX CREDIT FOR BALANCING, Furthermore, the eligibility of above tax credit
MODERNIZATION AND REPLACEMENT has been made subject to an additional condition
ETC. that none of the assets of trusts or welfare
institutions should confer a private benefit to the
The tax credit in respect of investments made in donors or family, children or author of the trust
balancing, modernization and replacement, etc. or his descendants or the maker of the institution
will not be available in respect of plant and or to any other person. In case any such private
machinery installed after June 30, 2019 as benefit is conferred, the amount of such benefit is
against June 30, 2021 under the current proposed to be taxed in the hands of the donor.
provision, however, the carry forward of
unabsorbed tax credit relating to prior years shall
continue to apply after June 30, 2019. The rate of TRANSFER PRICING REPORT
tax credit for tax year 2019 is also proposed to be FROM INDEPENDENT CHARTERED
reduced from 10% to 5% of the amount of eligible ACCOUNTANT OR COST AND
investment. MANAGEMENT ACCOUNTANT
Presently, tax credit is allowed to trusts or welfare Provisions in respect of unexplained income or
institutions, without a requirement to obtain an assets were not applicable in case of foreign
approval from the Commissioner as is otherwise exchange remitted from outside Pakistan through
required for other Non Profit Organisations. It is normal banking channels. This was limited to an
now proposed that trusts and welfare institutions amount of Rs 10 million per year through Finance
will also be required to obtain similar approval Act, 2018. The limit is now proposed to be
from the Commissioner after June 30, 2019. reduced to Rs 5 million per year.
17
The President of Pakistan promulgated Assets The Bill proposes to empower the Commissioner
Declaration Ordinance, 2019 on May 14, 2019 to raid any premises where there is reliable
which has now been made part of the Finance Bill information of undeclared gold, bearer security
in the form of Assets Declaration Act, 2019 with or foreign currency and confiscate the same in
certain minor amendments. order to enforce any provision of the Ordinance.
Through Finance Act, 2018, it was introduced Exemption had been granted by the Federal
that a taxpayer shall not be selected by the FBR Government through Notifications to the income
and the Commissioner Inland Revenue (CIR) in of any individual domiciled or Company and
terms of sections 177 and 214C of the Income Tax Association of Persons of Khyber Pakhtunkhwa
Ordinance, 2001 for a tax audit where its income and Balochistan, with effect from June 1, 2018 to
tax affairs were already audited in any of the June 30, 2023. Under the law, the Federal
preceding three tax years. The said relief is now Government is required to place all such
proposed to be withdrawn. Notifications before the National Assembly for its
approval.
SALES TAX
Presently Third Schedule of the ST Act covers Following items are proposed to be included in
only goods manufactured in Pakistan, however, it the Third Schedule, which will henceforth be
is now proposed to include items imported of liable to sales tax on retail price basis.
similar nature by importers through necessary
amendments in the following provisions.
Entry Description PCT
Definition of retail price No. Heading
38. Household electrical goods, Respective
including air conditioners, headings.
Definition of value of supply refrigerators, deep freezers,
televisions, recorders and
Scope of levy of tax on retail price players, electric bulbs, tube-
lights, electric fans, electric
irons, washing machines and
EXPORT ORIENTED SECTORS (SRO 1125) telephone sets
39. Household gas appliances, Respective
Supplies of certain finished textile and leather including cooking range, headings.
products which were previously subject to ovens, geysers and gas
various reduced rates under SRO 1125(I)/2011 heaters
dated December 31, 2011 are now proposed to be 40. Foam or spring mattresses Respective
and other foam products for headings.
subject to standard rate of 17%. Certain items household use.
have been included in the Eighth Schedule to be 41. Paints, distempers, enamels, Respective
taxed at 10% and 15% subject to certain pigments, colours, varnishes, headings.
conditions. gums, resins, dyes, glazes,
thinners, blacks, cellulose
The Board is empowered to issue notification for lacquers and polishes sold in
allowing refund of input tax to exporters to be retail packing
paid along with duty drawback at specified rates. 42. Lubricating oils, brake fluids, Respective
Now it is proposed to empower the Board to allow fluids sold in retail packing headings.
refund of input tax to exporters only at fixed transmission fluid, and other
vehicular fluids sold in retail
rates. packing
43. Storage batteries excluding Respective
TIER – I RETAILER those sold to automotive headings.
manufacturers or assemblers
It is proposed to include in the definition of 44. Tyres and tubes excluding Respective
Tier-I retailers, such retailers whose shop those sold to automotive headings.
measures one thousand square feet or more in manufacturers or assemblers
area. 45. Motorcycles Respective
headings.
It is also proposed to exclude Tier-I retailers from 46. Auto Rickshaws Respective
collection of sales tax through monthly electricity headings
bills. However, said retailers will be required to
comply with other provisions of the ST Act for Some of the above items were earlier subject to
levy of tax on supplies. Extra Tax provisions under the respective Sales
Tax Special Procedure Rules.
The customers of Tier-I retailers are proposed to
be entitled to receive a cash back of upto 5% of the
tax involved in manner and extent as may be
prescribed by the Board.
21
The Federal Government is empowered to notify Electricity and natural gas supplied to
special procedures for payment of tax and hospitals run by Federal or Provincial
ancillary matters. It is now proposed to transfer Governments or charitable operating
such powers to the Board. hospitals of fifty beds or more or the teaching
hospitals of statutory universities of 200 or
AUDIT SELECTION CRITERIA more beds; and
The Bill proposes to insert Eleventh Schedule It is proposed to disallow input tax credit
prescribing the rates of withholding tax by attributable to supplies made to unregistered
specified withholding agents in manner and persons, on pro-rata basis for which sales
mode to be prescribed by the Board, presently invoices do no bear the CNIC number of the
covered in Sales Tax Special Procedure buyer.
(Withholding) Rules, 2007 with certain
modifications.
LIMIT OF ADJUSTABLE INPUT TAX
POWER TO NOTIFY GOODS SUBJECT TO
ZERO RATING Input tax in excess of 90% of output tax for a tax
period is required to be carried forward. It is now
The power of the Federal Government to notify proposed to empower the Board to issue
goods subject to zero rating is proposed to be notification relaxing the aforesaid limit to 95% in
restricted to only those circumstances which certain cases.
involve national emergencies or are necessary for
implementation of bilateral and multilateral
agreements.
The powers of the Federal Government to grant It is proposed to increase penalty for late filing of
exemptions in following circumstances are return from Rs 5,000 to Rs 10,000. Further, in
proposed to be withdrawn: case the return is filed within 10 days of the due
date, the penalty is proposed to be increased from
Protection of national economic interests in Rs 100 per day to Rs 200 per day.
situations arising out of abnormal fluctuation
in international commodity prices;
CRIMINAL PROCEEDINGS
Removal of anomalies in taxes;
A new section 33A is proposed to be inserted
Development of backward areas; and whereby the Board may prescribe rules for
initiating criminal proceedings against any
Matters relating to international financial specified authority for wilfull or deliberate
institutions or foreign government owned acts/omissions resulting in personal benefits and
financial institutions. undue advantage to authority, person or
taxpayer.
TAX INVOICES
LIABILITY IN CASE OF A PRIVATE
It is proposed to allow registered person to issue COMPANY
tax invoices in either Urdu or English language.
CNIC numbers shall be mentioned in case of Presently directors of a private company are
supply to unregistered person. Additional jointly and severally liable for payment of tax on
requirement related to description and quantity winding up / liquidation of a private company if
of goods in case of textile yarn and fabric are also tax is not paid by the said company. It is now
proposed. proposed that shareholders of a private company
owning not less than 10% of the paid up capital
also be made liable. Any tax so paid by the
SELECTION FOR AUDIT ONCE IN THREE shareholder is also proposed to be made
YEARS recoverable from the private company or other
director or shareholder.
Vide Finance Act, 2018, selection for audit was
restricted to once in every three years. Now it is
proposed to omit this restriction.
REVISION OF RETURN
CEMENT
Amount of duty
Description
Duty on cement is proposed to be enhanced by Current Proposed
For journeys exceeding Rs 2,000 Rs 1,500
33% from Rs 1.5 to Rs 2 per kilogram implying an
500 kilometers (Long
increase of Rs 25 per standard bag of 5o kilogram. routes)
For journeys not Rs 1,250 Rs 900
LIQUIFIED NATURAL GAS (LNG) exceeding 500 kilometers
(short routes)
Duty on LNG is proposed to be substantially
increased from “Rs 17.18 per hundred cubic
meter” to “Rs 10 per MMBTu” to bring it at par
with that applicable on local natural gas.
26
CUSTOMS ACT
CLEARANCE ON PROVISIONAL BASIS A time limit of one hundred and twenty days
further extendable by a period of sixty days by the
At present, only importers are allowed to get the Board for passing the order under section 195 for
clearance of their consignments on provisional reasons to be recorded in writing has now been
basis in case of a disputes to the value or proposed.
classification thereof. It is proposed to extend this
facility to exporters as well.
31
OTHER LAWS