ISLAMABAD: Following are the salient features of amendment made to Income Tax Ordinance, 2001 through Finance Bill, 2022.
REVENUE MEASURE:
1. Increase in tax rate for banks for tax year 2023 onwards from effective 39 per cent to 45 per cent.
2. Increase in tax rate of banking companies on adverse ADR ratio.
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3. Tax on higher earning persons for poverty alleviation for tax year 2022 and onwards.
4. Tax on deemed income from unutilized property above Rs. 25 million including luxury farmhouses and exclusive of one self-occupied house.
5. Increase in rate from 1 per cent to 2 per cent on sale and purchase of property for filers.
6. Increase in rate from 100 percent to 250 percent in case of purchase of property by persons who are not active taxpayers.
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7. Increase in rate of 200 from 100 percent in case of purchase of motor vehicles by persons who are not active taxpayers.
8. Level playing field for all classes of assets. Capital gain tax on disposal of securities and real estate synchronized along with incentives for vertical growth of cities.
9. Increase in advance tax rate on private vehicles of 1600 cc and above.
10. Increase in yearly advance tax rate on tax on passenger vehicles.
11. Omission of deductible allowance for profit on debt and tax credit for investment in shares, health insurance and pension funds.
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12. Restriction on carry forward of minimum tax in subsequent years.
13. Omission of exemption on flying allowances and submarine allowance.
14. Omission of reduced rate of taxation for investment in Government securities.
15. Withdrawal of Income Tax (Amendment) Ordinance, 2022.
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RELIEF MEASURES:
1. Fixed tax regime for retailers and specified service providers.
2. Restriction on frequency of audits to once in four years.
3. Adjustment of tax collected on all materials at import stage for industrial undertaking for own use.
4. Relief on taxation for salaried and business individuals by increasing threshold for taxation.
5. Admissibility of 100 per cent depreciation in first year.
6. Reduction in tax rate from 10 per cent to 5 per cent on Bahbood certificates.
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7. Withdrawal of withholding tax on educational expenses payments.
8. Exemption from tax on income of certain non-profit entities.
9. Reduced rate of 3 per cent on provision of services by REIT management company and NCCPL.
10. Withdrawal of withholding tax on rent of machinery.
11. Exemption from advance taxes to exempt entities.
STREAMLINING MEASURES:
1. Requirement for adoption of digital mode of payment for companies.
2. Clarification regarding exempt income of partners if income of AOP is exempt.
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3. Introduction of Synchronized Withholding Administration Payment System.
4. Streamlining of audit procedures.
5. Increase in time limitation for best judgment from 5 to 6 years.
6. Enhancement of restriction for passing of order in from 120 to 180 days.
7. Clarification regarding remittance through money transfer operations.
DOCUMENTATION OF ECONOMY MEASURES:
1. Inclusion of concept of beneficial owner.
2. Alignment of Point of Sale regime with Sales Tax provisions and introduction of prize scheme.
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3. Increase in scope of tax on payments to non-residents and enhancement of rate from 5 per cent to 10 per cent on offshore digital services.
4. Increase in scope of criteria for becoming tax resident individuals.
5. Introduction of advance adjustable tax on credit/debit card payments.
6. Sharing of information between NADRA and FBR for tax base broadening.
