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Category: Budget 2021-2022

  • Budget 2021/2022: salient features of measures taken in income tax

    Budget 2021/2022: salient features of measures taken in income tax

    ISLAMABAD: The federal government on Friday announced budget for fiscal year 2021/2022 and notified relief and revenue measures in income tax.

    REVENUE MEASURES

    • Special regime for export of services at par with export of goods to be taxed @ 1% under final tax regime.

    • Elimination of block taxation of property income and shift to normal tax regime.

    • Reduction of block taxation on capital gain on disposal of immoveable properties if gain exceeds Rs. 20 million.

    • Reduction in block taxation on interest income, if it exceeds Rs. 5 million.

    • Tax on “on” money on vehicles, if vehicle is disposed without registration.

    • Expansion of scope of withholding tax collection from supply chain below manufacturers and importers of specified sectors (sections 236G and 236H).

    • Reduction in threshold of monthly electricity bill for withholding tax on electricity consumption from 75,000 to 25,000 from domestic users not appearing on Active Taxpayers’ list.

    • Removal of requirement of issuance of separate notice in concealment cases.

    • Withholding of tax on rental income of sub-lessee.

    • Broadening of scope of withholding agents for the purpose of collection of withholding tax on commission income (section 233).

    • Streamlining withholding tax collection on sale and purchase of immoveable property (section 236C and 236K).

    • Rationalization of withholding tax regime for exporters.

    • Taxability of profit on debt component of GP fund and other such funds.

    • Withdrawal of personal income tax exemptions.

    • During the current financial year, Tax Laws (Second Amendment) Ordinance, 2021was promulgated to implement corporate income tax reforms to provide level playing field to all businesses. Certain tax credits, concessions and exemptions were withdrawn. The provisions of the Ordinance have been made part of the Finance Bill.

    RELIEF MEASURES

    • Deletion of 12 withholding taxes

    Sections of Income Tax Ordinance, 2001

    153B: Collection of tax on payment of royalty to residents.

    231A: Collection of tax on cash withdrawal.

    231AA: Collection of tax on banking instruments.

    236P: Collection of tax on banking transactions other than through cash.

    236Y: Collection of tax from persons remitting amounts abroad through credit or debit or prepaid cards.

    236B: Collection of tax on domestic air travel.

    236L: Collection of tax on international air travel.

    236V: Collection of tax on extraction of minerals.

    233A: Collection of tax from members by a stock exchange registered in Pakistan.

    233AA: Collection of tax on marginal financing by NCCPL.

    234A: Collection of tax from CNG stations.

    236HA: Collection of tax on certain petroleum products.

    • Merging of 3 withholding taxes with other existing provisions

    Merged with

    150A: Deduction of tax on return on investment in Sukuks.

    Proposed to be merged in section 151 for residents and in section 152 for non-residents which deal with such payments.

    152A: Deduction of tax on payments for foreign produced commercials.

    To be merged with section 152 which deals with payments to non-residents.

    236S: Collection of tax on dividend in specie.

    To be merged with section 150 which deals with dividend.

    • Reduction in generalized rate on Minimum Tax on Turnover basis and increase in threshold for individuals and AOPs for chargeability of minimum tax.

    • Broadening of scope of IT services by inclusion of cloud computing and data storage services.

    • Exemption to Special Economic Zone Enterprises from payment of minimum tax.

    • Ten year tax exemption for Special Technology Zone Authority, Zone Developers and Zone Enterprises.

    • Tax exemption on the import of capital goods and dividend income of private funds from investment in special technology zone enterprise.

    • Introduction of special tax regime for manufacturing SMEs.

    • Exemption from tax on income of deep conversion new refineries and BMR projects of existing refineries for 10 years.

    • Reduced rate of withholding tax of 3% on oilfield services, warehousing services, logistic services, collateral management services and telecommunication services.

    • Inclusion of telecommunication services in definition of industrial undertaking.

    • Exemption to Electronic warehousing receipts traded on Pakistan Mercantile Exchange.

    • Allowance of provincial WWF and WPPF as a deductible allowance while calculating income.

    • Adjustment of business loss against property income.

    • Unconditional grant of exemption from tax to certain organizations.

    • Withdrawal of power of Commissioner to reject advance tax estimates presented by taxpayer.

    • Non recognition of gain/loss on disposal of assets to non-residents under gift from relative, inheritance and agreement to live apart.

    • Reduction in tax rate on capital gain tax on disposal of securities from 15% to 12.5%.

    • Withdrawal of power of tax authorities to conduct inquiry under section 122(5A).

    • Inclusion of live animals, raw hides and unpackaged meat in definition of agriculture produce.

    • Reduction in tax liability by 25% for women entrepreneurs.

    • Exemption from tax on import of books and agriculture equipment.

    • Exemption from tax for bagasse fired power generating units and reduced rate of tax on dividend income from such projects.

    • Extension in time limits for availing tax benefits under section 100D and Eleventh Schedule vide Income Tax (Amendment) Ordinance 2021 dated 21.02.2021 made part of the bill.

    • Tax exemptions and concessions for Roshan digital accounts and implementation of electric vehicles and mobile phone policy implemented vide Tax Laws (Amendment) Ordinance, 2021 dated 11.02.2021 made part of bill.

    STREAMLING MEASURES

    • Strengthening mechanism of Alternate dispute resolution.

    • Elimination of requirement of filing of application for automated issuance of refund.

    • Introduction of time limitation for disposal of show cause notices.

    • Recording of e-hearing to be admissible evidence.

    • Automated issuance of exemption certificates if application is not disposed by Commissioner within 15 days.

    • Removal of requirement of updating tax profile.

    • Clarity regarding taxation of income of co-operative societies from sale and services to its own members.

    • Delegation of power of Federal Government to Board with the approval of Federal Minister in-charge.

    • Extension of time limitation for issuance of notice for filing of return in case of foreign income or foreign assets.

    • Time limitation for completion of assessment in pursuance of orders of the Commissioner.

    • Streamlining measure for monitoring of withholding taxes requiring taxpayers to file online statement along with reconciliation.

    • Establishment of Directorate of compliance Risk Management in FBR.

    DOCUMENTATION MEASURES

    • Tax credit on installation of point of sale machines.

    • Notification of business bank accounts made mandatory.

    • Measures for the documentation of business of used cars.

    • Harmonization of procedure for investigation and prosecution of offences under domestic tax laws.

  • Budget 2021/2022: key features of spending under public sector development program

    Budget 2021/2022: key features of spending under public sector development program

    ISLAMABAD: The federal government on Friday presented budget for fiscal year 2021/2022 and allocated Rs900 billion for public sector development program (PSDP).

    Following are the highlights of allocations PSDP for various ministries and divisions for the fiscal year 2021-22 announced by the Federal Government here Friday:

    — Total outlay of the PSDP for the fiscal year 2020-21 is Rs 2.1 trillion

    — The share of federal PSDP is Rs 900 billion while that of provincial PSDP is Rs 1.235 trillion.

    — Rs 3,558.2 million has been earmarked for Aviation Division.

    — Board of Investment will get Rs 80 million.

    — Rs 46,155 million has been earmarked for Cabinet Division.

    –The Climate Change Division will get Rs 14,327 million.

    — Rs 1,613 million has been set aside for Commerce Division.

    — Rs 451.32 million are allocated for Communication Division (other than NHA).

    — Rs 1,977.63 million has been earmarked for Defence Division.

    — Rs 1,745 million has been set aside for Defence Production Division.

    — Rs 800 million are allocated for Establishment Division.

    — The Federal Education and Professional Training Division will get Rs 9,700 million.

    — Rs 123,131 million has been allocated for Finance Division.

    — The Higher Education Commission (HEC) will get Rs 42,450 million.

    — Rs 24,211.5 million has been earmarked for Housing and Working Division.

    — Rs 279 million will be provided to Human Rights Division.

    — Rs 2,916 million has been set aside for Industries and Production Division.

    — Rs 1,899 million are allocated for Information and Broadcasting Division.

    — Rs 9,361.05 million will be provided to Information Technology and Telecom Division.

    — Rs 3,734.73 million has been set aside for Inter-Provincial Coordination Division.

    — Rs 2,1048.71 million has been granted for Interior Division.

    — Rs 69,959.9 million has been earmarked for Kashmir Affairs & Gilgit Baltistan Division.

    — Rs 6,027.35 million has been earmarked for Law and Justice.

    — Rs 4,461 million has been allocated for Maritime Affairs Division.

    — Rs 489.39 million has been granted to Narcotics Control Division.

    — Rs 12,017 million has been earmarked for National Food Security and Research Division.

    — Rs 21,722 million has been allocated for National Health Services, Regulation & Coordination Division.

    — Rs 125.9 million has been provided for National Culture and Heritage Division.

    — Rs 27,000 million has been earmarked for Pakistan Atomic Energy Commission.

    — Rs 200 million has been set aside for Pakistan Nuclear Regulatory Authority.

    — Rs 2,349.5 million has been earmarked for Petroleum Division.

    — Rs 19,245.5 million has been allocated for Planning, Development and Special Initiatives Division.

    — Rs 589.9 million has been allocated for Poverty Alleviation and Social Safety Division.

    — Rs 30,025.6 million has been set aside for Railway Division.

    — Rs 493 million has been allocated for Religious Affairs and Interfaith Harmony Division.

    — Rs 4,025.06 million has been earmarked for Revenue Division.

    — Rs 8,341 million has been earmarked for Science and Technology Research Division.

    — Rs 7,368.86 million has been earmarked fr SUPARCO.

    — Rs 103,472.69 million has been allocated for Water Resource Division.

    — Rs 113,750 million has been set aside for National Highway Authority.

    — Rs 69,485 million has been allocated for NTDC/PEPCO.

    — Rs 5000 million has been set aside for COVID Responsive and Other Natural Calamities Programme.

    — Rs 61,500 million for Viability Gap Fund (VGF)

    — Rs 22,000 million set aside for SDGs supplementary fund

  • Budget 2021/2022: salary and pension increased by 10 percent

    Budget 2021/2022: salary and pension increased by 10 percent

    ISLAMABAD: The federal government on Friday presented budget 2021/2022 and announce an increase of 10 percent in basic salary and pension of the government employees.

    While delivering the budget speech for the year 2021-22, Minister for Finance Shaukat Tarin announced that the increase in salaries and pensions of the federal government employees would be applicable from July 01, 2021.

  • Budget 2021/2022 at a glance

    Budget 2021/2022 at a glance

    ISLAMABAD: The federal government on Friday presented budget for fiscal year 2021/2022.

    Following is the budget at a glance:

    Total resources: Rs8,487 billion

    Total revenue (Federal Board of Revenue): Rs5,829 billion

    Non Tax Revenue: Rs2,080 billion

    • Gross Revenue Receipts: Rs7,909 billion
    • Less Provincial Share: Rs3,412 billion
    • Net Revenue Receipts (a-b):  Rs4,497 billion
    • Non Bank Borrowing (NSSs & Others): Rs1,241 billion
    • Net external receipts: Rs1,246 billion
    • Estimated provincial surplus: Rs570 billion
    • Bank Borrowing (T-Bills, PIBs, Sukuk): Rs681 billion
    • Privatization Proceeds: Rs252 billion

    Total Expenditures Rs8,487 billion

    1. Current: Rs7,523 billion

    Interest payments: Rs3,060 billion

    Pension: Rs480 billion

    Defence Services: Rs1,370 billion

    Grants and Transfers to Provinces and Others: Rs1,168 billion

    Subsidies: Rs682 billion

    Running of Civil Government: Rs479 billion

    Provision for contingencies and Fund: Rs25 billion

    Provision for Disaster/Emergency/ COVID: Rs100 billion

    Provision for pay and pension: Rs160 billion

    • Development: Rs964 billion

    Federal PSDP: Rs900 billion

    Net lending: Rs64 billion

  • Preparation for Budget 2021/2022 finalized, to be presented on June 11

    Preparation for Budget 2021/2022 finalized, to be presented on June 11

    Despite the ongoing challenges posed by the third wave of the COVID-19 pandemic, the Pakistani government is gearing up to present its third budget for the fiscal year 2021-22 in the Parliament on June 11, Friday.

    (more…)
  • SECP proposes exemption of additional CGT on foreign investors

    SECP proposes exemption of additional CGT on foreign investors

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has recommended exemption of additional capital gain tax (CGT) on disposal of shares in case of foreign investors, who are not on the Active Taxpayers List (ATL).

    The SECP submitted tax proposals for budget 2021/2022 to the Federal Board of Revenue (FBR).

    The SECP submitted following proposal in case of CGT:

    Exempt foreign investors from applicability of 100 percent additional tax in case their name is not appearing in Active Taxpayers List (ATL) in the Tenth Schedule

    Core objectives

    Presently, 44 percent of total foreigners investing through PSX are currently not appearing in ATL list as a result of which they are subject to Capital Gain Tax (CGT) @ 30 percent.

    For such investors who do not have any other source of income in Pakistan except capital gains, should not be subject to additional 100 percent tax for not being in the ATL

    Align it simplified tax regime for Roshan Digital Account (RDA) holders, wherein tax rate applicable for persons appearing on ATL will be charged to RDA holders

    Foreigners may be subject to taxation in their home country being resident tax payer therefore, a balanced taxation of their income in Pakistan is essential

    Benefit to Economy

    The rationale taxation of foreigner’s income from investment will result in inflow of foreign exchange, boosting foreign exchange reserves of the country.

    Broaden investor base of capital markets and more liquidity to capital markets by luring foreign investors.

    Impact on Tax Revenue

    Foreigners represents approximately 5 percent of overall capital market investors trading and removing additional tax will not materially impact tax revenue.

    Fresh investments will result in further tax revenue, in case tax incentives are provided.

    Comparable regional practices relating to taxability

    A brief overview of CGT practices adopted in other regions is provided below:

    CountryRate of CGT
    Bangladesh15 percent
    India10 percent – Long term 15 percent – Short term
    MalaysiaNil
    KyrgyzstanCGT are subject to ordinary income tax rate at 10 percent
    Nigeria10 percent
    MauritiusCorporate: 15 percent if holding period is less than 6 months Individual: 10 percent if income is less than MUR 650,000 & 15 percent if income is more than MUR 650,000
    OmanNil
    UAENil
    SingaporeNil
  • Value added textile exporters demand 50 percent reduction in withholding tax

    Value added textile exporters demand 50 percent reduction in withholding tax

    KARACHI: The association of value added textile exporters on Wednesday demanded to reduce the withholding income tax by 50 percent in order to reduce burden on manufacturers and improve country’s foreign exchange earnings.

    In a joint press conference, the exporters demanded the government of restoring Zero Rating – No Payment No Refund System, continuation of Duty Drawback of Taxes (DDT) & Technology Up-gradation Fund (TUF) scheme, reduce WHT rate to 0.5 percent, suspension of Export Development Fund (EDF) surcharge, reduce and fix tariffs of electricity, indigenous gas & RLNG, continuation of duty free import of cotton yarn in the forthcoming Federal Budget 2021-2022.

    Zubair Motiwala, Chairman, Council of All Pakistan Textile Mills Associations; Jawed Bilwani, Chairman, Pakistan Apparel Forum; Tariq Munir, Chairman, Pakistan Hosiery Manufacturers & Exporters Association, Rafiq Godil, Chairman, Pakistan Knitwear and Sweater Exporters Association; Feroze Alam Lari, Chairman, Towel Manufacturers Association of Pakistan; Abdus Samad, Chairman, Pakistan Cloth Merchants Association, Zulfiqar Ch., Chairman, All Pakistan Textile Processing Mills Association; Shaikh Shafiq, Former Chairman, Pakistan Readymade Garment Manufacturers & Exporter Association; Khawaja M. Usman, Former Chairman, Pakistan Cotton Fashion Apparels Manufacturers & Exporters Association, Amin Allana, Chairman, All Pakistan Bedsheets & Upholstery Manufacturers Association, Yusuf Yaqoob, Chairman, Pakistan Weaving Manufacturers Association participated in the Joint Press Conference held at PHMA today.

    The Chairmen of the Value Added Textile Exports Associations apprised that they have submitted Budget Proposals to the Federal Government wherein the top demand is to restore Zero Rating on GST – “No Payment No Refund Regime” through revival of SRO 1125 in letter & spirit as SME exporters have been closed down and decreased by 30% as compared to last year due to imposition of 17% which blocked exporters precious liquidity. They were of the view that the textile exporters are optimistic and hopeful that the Government in the Federal Budget 2021-22 will seriously consider and accept their demands, proposals and recommendations.

    They highlighted that despite COVID19, the textile exports have increased by 17.35% as compared to last year and will InSha-ALLAH reach to US$ 15.50 billion in FY 2020-21 owing to incumbent Government’s pragmatic policies – payments of Drawback of Local Taxes & Levies (DLTL) / Duty Drawback of Taxes (DDT), special / competitive tariff and uninterrupted supply of utilities. They stated that It is on record that due to commencement and payments of DLTL Scheme in 2009, the Textile Exports have increased by 7.3% in 2010 and by 35% in 2011. However, in 2012, textile exports were decreased by 10.66% due to withheld payments of DLTL. Therefore it is most crucial that the Government must continue the DDT scheme for the next five years. They demanded that Duty Drawback of Taxes on Garment, Home Textile & Fabric exports should be provide @ 7%, 6% & 5% respectively on shipment basis for next five years to compete in the international market as competing countries are extending same around 12% to 16%. With commitment, the rates will be increased every year by 1% which means 7%, 6% & 5% in 2021-22, 8%, 7% & 6% in 2022-23, 9%, 8% & 7% in 2023-24 and so on, respectively. Further, Incremental DDT, on an increase of 10% exports over previous year, should also be provided @ 2%. This will bring huge investments in textile sector and shall encourage new-comer exporters to invest in textile sector.

    They said that with the introduction of Technology Up-Gradation Fund (TUF) scheme in 2009, 30% Capacity of Textile Sector has been enhanced. Therefore, it is imperative to reinstate Technology Up-Gradation Fund (TUF) Scheme for next five years. This will bring up-gradation and advancement in technology leading to production enhancement as well as exports. 0.25% Export Development Fund (EDF) Surcharge is deducted from export proceeds of the exporters for export development since 1992. Collection of EDF surcharge is approx. Rs9 billion annually. Presently Govt. has Rs58 billion in its kitty on account of EDF. Hence, they demanded to the Government to suspend collection of Export Development Surcharge till unutilized amount of Rs58 billion of Export Development Fund (EDF) is exhausted. Exporters fall under Final Tax Regime and required to pay 1% WHT of their export proceeds. They demanded that Withholding Tax (WHT) should be reduced from 1% to 0.5% for exporters as this would also help the  exporters in using the cash liquidity for enhancement of the exports.

    The present Government had announced separate tariff of gas and electricity for export sectors with an assurance that this tariff will last for 3 years. However, tariff of gas and electricity was enhanced after a year. To compete in the internationally and capture more markets, it is crucial that tariff of Electricity, Indigenous Gas and RLNG for exporters should be fixed at 7.5 cents/kwh, Rs819/MMBTU and $6.5/MMBTU respectively for next five years and the same should be applied countrywide.

    Owing to historically low cotton production in the country and severe shortage of cotton yarn, on demand of the Value Added Textile Sector, Government has allowed duty free import of Cotton Yarn till 30th June, 2021. We understand that the Government should continue duty free import of cotton yarn until Pakistan’s cotton production reaches to 14 million bales. They recommend that permission for import of Raw Materials and Intermediate Goods for manufacturing of finished goods meant for export under Duty & Tax Remission for Exporters (DTRE) should be automated and allowed to registered Textile Exporters through Ministry of Commerce Textile Industry’s RDA Cell whose licence is renewed after every two years as RDA Cell, Textile Division, Ministry of Commerce has complete details of textile units i.e. production, exports, machinery, exportable items details including HS Codes, Value, Quantity etc. Subsequently, once RDA Cell approves the permission for import of Raw Materials and Intermediate Goods under DTRE and it should be processed on fast track within 48 hours by Customs, accordingly.

    It is pertinent to mentioned that Value Added Textile Exports contribute to around 62% in total exports, provides 42% urban employment particularly to female workforce who mostly are widows and orphans, earns highest foreign exchange and supports approx. 40 allied industries. In this manner, the value added textile industry playing pivotal role to strengthen the economy and prosperity of the country. They were of the view that the exports must remain top priority of the Government as it is the lifeline of economy deserves government’s continuous support. If the Government assures to extend the deserving support to the Value Added Textile Export Sector it has the capacity to achieve the milestone and pledges to enhance its exports by 30% and will reach at US $20 billion in FY2021-22 and shall increase by 25% every year onward 2022-2023 resulting to surplus trade of Pakistan, more foreign exchange earnings & additional employment.

  • SECP suggests measures to document real estate sector

    SECP suggests measures to document real estate sector

    ISLAMABAD: Securities and Exchange Commission (SECP) has submitted its tax proposals for budget 2021/2022 for documenting real estate sector and promotion of Real Estate Investment Trusts (REITs).

    The SECP submitted following suggestions for documenting real estate sector and promotion of REITs:

    (i) Reduce tax on dividend from REITs from 25 percent to 15 percent to synchronize it with mutual funds [First schedule, Part-1, Division-III, paragraph B] of Income Tax Ordinance, 2001.

    (ii) Exempt advance tax on property transfers to/from a REIT Scheme u/s 236C and 236K of Income Tax Ordinance, 2001.

    (iii) Exemption for CGT provided in clause 99A, Part 1, 2nd schedule be applied to all categories of REITs (mix-use projects) without any sun-set clause

    (a) Core objective of the proposals:

    • To support government vision for development of housing sector and allied industries

    • To promote regulated real-estate sector for promoting documentation and transparency

    • To introduce level playing field for regulated sectors

    • To remove disadvantage/dis-incentive caused to the REIT sector (Presently 1 licensed REITs, 4 REITs in pipeline and 9 RMCs registered)

    • To increase overall tax revenue for FBR and provincial revenue authorities

    (b) Direct and indirect impact on tax revenue (impact will be positive)

    • Direct tax revenue for FBR increases; example – Tax revenue of Dolmen City REIT is highest tax being paid compared to any other Mall bigger or of same size. In addition, corporate tax from RMC;

    • Encourages sector to grow thereby, fostering economic activity through allied industries resulting in higher tax collection;

    • Transfer of properties to the REIT structure will also induce proportional tax collection of provincial/local revenue departments;

    (c) Benefit for national economy

    • Promoting economic activity through regulated, documented and transparent models and moving towards formal economy

    • Level playing field for different investment avenues (collective pooled investments through REIT Fund)

    • Investor participation in real estate sector with protection of interests under the REIT law vis-a-vis, falling prey to unregulated real estate sector mushrooming in the market

    • Increase in revenue for the federal and local governments;

    • Disclosure and taxation of property transactions at market value instead of DC rates

    • Job creation related to construction, real estate and allied industries;

    • Broaden the investor base and size of capital markets;

    • Due to mandatory listing, small savers can share profits arising from real estate industry (which currently not available) – tax revenue from trading at stock exchange + CGT.

  • ACCA suggests imposing income tax on landowners

    ACCA suggests imposing income tax on landowners

    KARACHI: The Association of Chartered Certified Accountants (ACCA) has suggested the government to impose income tax at 7 percent on landowners to increase the agriculture share in the GDP.

    The ACCA in its proposals for budget 2021/2022 stated that agriculture (recently growing at 2.77 percent) has the potential to reach up to 55 percent of the GDP from the current levels of around 24 percent.

    “There’s a need for large landowners to be taxed at minimal rates, i.e. 7 percent,” it added. The revenue generated through this should be used to subsidise seeds, fertiliser, water, electricity, fuel, etc. for the small farmers. The use of latest, sustainable farming technology and easy access to cheap or interest-free loans should be ensured.

    It urged the government to reduce tax rates to a single digit and ensure broadening of the tax net by adopting Data Analytics and Artificial Intelligence leveraging rich data sources at government’s disposal such as NADRA.

    The proposals also talk about the importance of moving away from indirect taxes and calls for rationalisation, standardisation and automation of tax laws & administration to minimise harassment of taxpayers.

    The suggested structural reforms include harmonisation of federal and provincial tax laws, issuance of a single tax return, reduction in the discretionary powers of tax authorities, predicating appraisals of FBR functionaries on growth of business sectors under jurisdiction to instil a mindset of using tax as a means for GDP growth, incentivising tax payers to promote a tax culture, and establishing an independent appellate forum at Commissioner Appeals level.

    The proposals also hope for the government to have a long-term strategy for import substitution, call for more incentives to local industry and favours heavy duties on non-essential imports and luxury items. Tax benefits to businesses pioneering UN’s SDGs have been recommended.

    The negative growth in sectors such as mining and quarrying (-6.49 percent) and electric generation (-22.96 percent) is also highlighted for the government to take immediate action.

    Proper legislation and rationalisation can help improve the situation for mining and can also result in attracting FDI. Focus on bringing down line losses, improving energy mix with clear plan for transition to renewables, as well as revising the existing costly agreements, can help reduce the negative trend for the electricity generation.

    The document lauds government’s interventions such as Roshan Digital Account and incentives to the construction sector and mega projects such as Ravi Riverfront and calls for their continuation and further enhancements.

    The global body has shown concern about the growing unemployment (11.56 percent) among the youth aged 20-24 and urges government to make youth employment one of the focus areas with considerable spending in the budget 2021-2022.

    Further innovations in the Kamyab Jawan programme and introduction of new skills development and entrepreneurship support programmes with focus on emerging technologies should be government’s priority.

    Significant increase in education budget with new programmes by provinces to support girls’ education, as well as adequate spending towards health and communications infrastructure, has been termed the ‘need of the hour’ by the global body. ‘Facilitation of high broadband penetration is critical for the future-fitness of our education sector and public services delivery,’ said ACCA.  

    Segmented approach in programmes such as Ehsas to ensure benefits reach the most marginalised segments of community across the country should be adopted for an inclusive growth.

    Close collaboration with the IT/ITeS sector is needed, and the sector should be offered with tax rebates to facilitate its expansion. Similar to CPEC, it’s believed that there’s a potential for something like ‘China-Pakistan Technology Zone’ to connect our innovation value chain with economies in the region.

    It’s also pointed out that the past outstanding refunds have only been cleared partially. It’s important to strengthen the trust of the taxpayer as well as provide liquidity to businesses, especially at a time when businesses are recovering from the effects of the pandemic.

    It’s reiterated that government needs to ensure openness and transparency to foster trust and cultivate a healthy tax culture in the country.

    ACCA has also confirmed that it will be holding a number of seminars to discuss its budget proposals engaging country’s top business leaders and policy makers.

  • Introduction of new tax regime under consideration: Tarin

    Introduction of new tax regime under consideration: Tarin

    ISLAMABAD: Finance Minister Shaukat Tarin on Monday said that the government is considering to introduce a new tax regime that is in accordance with the changing economic environment.

    The finance minister said this at a meeting with Managing Director / CEO Pakistan Stock Exchange Farrukh H. Khan to review proposals for Federal Budget 2021-2022.

    The Federal Minister for Finance and Revenue, Shaukat Tarin, chaired the meeting here at the Finance Division with Adviser to PM on Austerity and Institutional Reforms Dr. Ishrat Hussain, SAPM on Finance and Revenue Dr. Waqar Masood, Chairman FBR and Secretary Finance Division were also present during the meeting.

    MD, Pakistan Stock Exchange (PSX) gave a detailed presentation on the huge impact of stock markets on wealth creation and mobilization of capital.

    He said that a broad-based capital market helps to achieve important economic and social objectives like increasing the number of tax payers, optimizing savings and investment rates, and reducing wealth inequalities.

    Tax measures are an important policy tool to increase investments and savings in the economy and to stay competitive with other markets.

    The Managing Director submitted proposals to align rates of capital gain tax on disposal of securities in line with regional practices, rationalization of tax rates for companies listed on the stock exchange, enhanced tax credit for listed small and medium enterprises, unlocking the potential of private funds and many other suggestions that will help broadening the tax base/ revenue collection.

    The finance minister appreciated the recommendations from the MD Stock Exchange and said that the present government is strongly committed to strengthening of the financial markets and is ready to adopt measures that could mobilize capital to more productive sectors.

    Shaukat Tarin welcomed the proposals and assured that these will be given due consideration in the upcoming budget.