ISLAMABAD: The Senate of Pakistan has recommended the government to abolish withholding tax on cash transactions from banks.
In its key tax recommendations for finalizing budget 2020/2021, the Senate recommended that the government should abolish all kinds of withholding tax chargeable on cash transactions from banks.
It recommended that instead of the proposed amendment in clause 3A and 3B of the Income Tax Ordinance, 2001, capital gain tax may completely be done away with on the sale and purchase of a house or a plot.
The Senate recommended that amendments in 5th Schedule of Customs Act and 6th Schedule of Sales Tax Act may be made for import of goods including vehicles and other equipment for sole use of the IPC to propagate its objectives subject to the certification of by the chair that such items are bon-fide requirement of the International Parliamentarians’ Congress (IPC) and shall not be disposed of without permission of the Federal Board of Revenue (FBR) and without payment of duty and taxes as may be ascertained by the Board.
The proposal of the government in the Finance Bill 2020 regarding disallowing of expenditure on utility bills from January 01, 2021, if actual user name is not appearing on bills, should be withdrawn.
The FBR must consider withdrawal of reduction of normal tax depreciation slashed by 50 percent for first year.
The provision of amendment in assessment under section 122(5) of Income Tax Ordinance, 2001 on the basis of audit even definitive information exists or not, should be withdrawn.
The government has been recommended that matter for filing of appeal before tribunal with the payment of 10 percent of tax, the commissioner of Inland Revenue must convey in his order that amount of tax upheld by the tribunal so that the deposit may be made accordingly.
The upper house recommended that the proposed addition of new sub-section 5 in section 7 of the Income Tax Ordinance, wherein board [FBR] may impose restriction on wastage of material for which taxpayer may claim input tax, should be withdrawn by the government to boost confidence of business on revenue authorities.
The Senate of Pakistan advised that before penalizing any passenger or member of the crew who attempts to bring into or take out of Pakistan, currency, gold, precious metals or stone in any form through concealment in baggage, the awareness campaign be made for the information of the passengers.
It is recommended that for filing the appeal before the appellate tribunal inland revenue, the taxpayer will have to deposit 10 percent of the demand upheld by the commissioner inland revenue (appeals), before filing of the appeal proposed in the Finance Bill 2020 should be withdrawn.
The Senate recommended that the sales tax for the textile sector should be reduced to 4 percent.
The upper house recommended that by keeping in view of the global business shrinkage and the challenges faced by the local textile industry on account of lockdowns, the government should restore the zero-rating facility or slash general sales tax from 17 percent to 4 percent for textile export sector.
The advance tax should be abolished on cars/vehicles up to 700 CC.