Pkrevenue.com

Category: Budget

This is parent category of budget presented by Pakistan government. Here you will find year-wise federal and provincial budgets.

  • CGT on immovable properties reduced by 50 percent

    CGT on immovable properties reduced by 50 percent

    ISLAMABAD: The capital gain tax on (CGT) disposal of immovable properties has been reduced by 50 percent in order to promote investment in construction industry.

    According to Deloitte Yousuf Adil, Chartered Accountants, the Finance Bill 2020 proposed reduction in tax rates by 50 percent on capital gains arising on disposal of immovable property.

    This is in line with the Government’s vision to promote construction industry and to provide stimulus for the growth in economy as construction sector provide employment to a number of sub-sectors.

    S. No.Amount of gainRate of tax
      ExistingProposed
    1.Where the gain does not exceed Rs.5 million5%2.5%
    2.Where the gain exceeds Rs.5 million but does not exceed Rs.10 million10%5%
    3.Where the gain exceeds Rs.10 million but does not exceed Rs.15 million15%7.5%
    4.Where the gain exceeds Rs.15 million20%10%

    A person responsible for registering, recording, or attesting transfer of immovable property is required to collect advance tax from seller of such property.

    Such advance tax is not collected where the immovable property is held for a period exceeding 5 years.

    The Bill proposes to reduce this time limit of 5 years to 4 years.

  • Automated scrutiny of tax returns to end universal self assessment scheme

    Automated scrutiny of tax returns to end universal self assessment scheme

    The Federal Board of Revenue (FBR) has introduced a significant policy shift through the Finance Bill 2020, proposing the automated scrutiny of all income tax returns, which may signal the end of the Universal Self-Assessment Scheme (USAS) in Pakistan.

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  • Highlights of tax relief announced by Khyber Pakhtunkhwa for 2020/2021

    Highlights of tax relief announced by Khyber Pakhtunkhwa for 2020/2021

    PESHAWAR: The Khyber Pakhtunkhwa government announced tax relief package in order to mitigate the adverse impact of coronavirus.

    Key points of the tax incentives to be granted during the next fiscal year.

    i. Sales tax on services (STS) will be reduced for over 27 categories. This will be an allencompassing reduction for sectors where the economic activity has dampened and directly impacted cash flow and liquidity. These sectors include business support services, construction sector, oil and gas exploratory services, hospitality sector, bargain centers etc.

    ii. Entertainment and Hotel Tax will be removed from Excise and Taxation department’s portfolio, to encourage recreation and entertainment during these testing times for the economy.

    iii. Professional Tax will be phased out to Khyber Pakhtunkhwa Revenue Authority dovetailed with tax breaks and concessions for a year to remove duplicity of taxes and provide relief for more than 15 professions involved including Doctors, Lawyers, Retailers etc.

    iv. To promote and incentivize the tourism sector, a special concession will be introduced for the hotels and restaurants located in hilly areas. Coupled with a reduced rate, a clause of tax hypothecation will be included to ensure that the tax collected from this sector is invested into the same regions’ growth and prosperity.

    v. Rates for the Urban Immovable Property Tax will be rationalized, and compliant taxpayers will be offered a rebate of 35%. This is directly intended to promote compliance, provide direct relief, encourage construction and comfort the taxpayers during this economic slump.

    vi. Urban Immovable Property Tax under the Excise and Taxation Department will be introducing special discounts or pending arrears. Under this scheme, special concessions will be introduced for those who volunteer to clear arrears, intention is to lend a helping hand to the construction sector during this liquidity crises.

    vii. Board of Revenue will reduce both Capital Value Tax and Stamp duty for the construction sector, under the Federal Amnesty Scheme. This concession will be amalgamated with a complete digitization of the system with reduced discrepancies.

  • Khyber Pakhtunkhwa presents Rs923 billion tax free budget for 2020/2021

    Khyber Pakhtunkhwa presents Rs923 billion tax free budget for 2020/2021

    PESHAWAR: The Khyber Pakhtunkhwa Government on Friday presented budget 2020/2021 with total outlay of Rs 923billion. The budget is a tax free and with an amount of Rs104 billion allocated for Annual Development Plan (ADP) for the next fiscal year.

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  • KCCI submits recommendations to rectify anomalies in Finance Bill 2020

    KCCI submits recommendations to rectify anomalies in Finance Bill 2020

    KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has submitted its recommendations to rectify anomalies in the Finance Bill 2020, highlighting concerns over several taxation measures impacting trade and industry.

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  • Reduction in rental income expense limit to encourage under-reporting

    Reduction in rental income expense limit to encourage under-reporting

    Presently, expenses incurred to the extent of 6 percent of rent chargeable wholly and exclusively for deriving rent are admissible as deduction against rental income.

    The Bill proposed to reduce the limit from 6 percent to 2 percent.

    The experts said that further reducing such limit would deprive a taxpayer for claiming a legitimate expense incurred solely for deriving taxable income and would ultimately lead to higher tax payable by the taxpayer. “It may encourage taxpayers to under-report their taxable income on the grounds that their legitimate expenses are disallowed,” experts at Deloitte Yousuf Adil Chartered Accountants said.

    Presently, income from property derived by an individual or an Association of Persons is subject to tax at the specified slab rates and treated as a separate block of income.

    However, individuals or AOPs whose income from property exceeds Rs 4 million per annum can opt to claim deductions under section 15A of the Ordinance and pay tax at normal rates specified in Division I of Part I of the First Schedule.

    The Bill proposed to abolish such limit of Rs. 4 million and therefore an individual or AOP can now opt for claiming tax deductions and pay tax at normal rates irrespective of amount of income derived from property.

  • PRA empowered to arrest tax defaulters, imprison for six months

    PRA empowered to arrest tax defaulters, imprison for six months

    LAHORE: Punjab Revenue Authority (PRA) has been empowered to arrest defaulters and imprison for six months for making recovery of outstanding tax.

    The Punjab Finance Bill, 2020 has proposed to empower PRA in certain provisions of Punjab Sales Tax Act, 2012 for making recovery of outstanding tax.

    According to interpretation of Punjab Finance Bill, 2020 by PwC A. F. Ferguson, the bill proposes to empower tax authorities whereby they may also require a financial institution or banking company to make payment of tax due from a registered person out of running and demand finance extended to the registered person.

    By way of insertion of clause (g) to section 70 of the Act, it also empowers the department to arrest a defaulter and imprison him for not more than six months where a tax demand has been upheld by the Appellate Tribunal.

    No action is presently taken where a person deposits at least 25 percent of the tax demand during pendency of an appeal. It is proposed to reduce this limit to 10 percent of the tax demand. This is a positive amendment.

    The amendments relating to administrative and procedural matters are summarized as under:

    — The power of the PRA to de-register a person is proposed to be devolved to the Commissioner.

    — The PRA is being authorized to specify format of invoices to be issued by a registered person or class of registered persons and to prescribe a procedure for authentication of such invoices.

    — The PRA or authorized officer may require any registered person or class of registered persons to issue invoices electronically and transmit such invoices to PRA in the prescribed manner.

    — To streamline audit proceedings, it is proposed to empower officers to conduct audit proceedings electronically through video links or any other facility as may be notified by PRA.

    — It is proposed to empower even officers, below the rank of an Assistant Commissioner, to call for information or documents regarding any enquiry or audit.

    Earlier, only an Assistant Commissioners or Officers with higher ranks may call for such information.

    — To facilitate taxpayers, it is proposed that appeal before the Commissioner (Appeals) may also be filed through electronically.

    — The period of filing an appeal before the appellate tribunal is proposed to enhance from 30 days to 60 days.

  • Punjab enlists records to be maintained by taxpayers

    Punjab enlists records to be maintained by taxpayers

    LAHORE: The service providers falling under the jurisdiction of Punjab Revenue Authority (PRA) are required to maintain records enlisted through provincial Finance Bill, 2020.

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  • Sindh Budget 2020-2021 at a glance

    Sindh Budget 2020-2021 at a glance

    KARACHI: The Sindh government on Wednesday presented budget for fiscal year 2020/2021. The following is budget at a glance:

  • Sindh unveils Rs1.2 trillion budget 2020/2021 with no new tax, 10 percent salary increase

    Sindh unveils Rs1.2 trillion budget 2020/2021 with no new tax, 10 percent salary increase

    KARACHI: Sindh Chief Minister Syed Murad Ali Shah on Wednesday presented Rs1.2 trillion provincial budget 2020/2021 with announcing no new tax and increase of 10 percent salary of the provincial government employees.

    On the floor of the house while delivering speech for budget 2020/2021, the chief minister said that the total outlay of budget for the next financial year 2020-2021 is Rs.1.2 trillion.

    The total size of current revenue expenditure is Rs.968.9 billion.

    “It is important to highlight here that for the next financial year, we have tried to align our Development as well as non-development expenditure priorities in line with the post COVID-19 situation,” the chief minister said.

    He said that during financial year 2019-20, the province faced financial constraints due to COVID-19 which significantly affected development progress in the entire country. Sindh was no exception.

    Government of Sindh budgeted Rs.284 billion as total development outlay in financial year 2019-2020, wherein Rs.208 billion were earmarked for Provincial ADP, Rs.20.0 billion for District ADP, Rs.51.0 billion in foreign projects assistance, and Rs.4.9 billion from Federal PSDP grant.

    Looking at the financial constraints, stakeholder departments are likely to complete 425 schemes during 2019-20, 33 schemes less as compared to 458 completed in 2018-19.

    “For the next financial year 2020-2021, the Administrative Departments in Sindh were earlier advised to prepare proposals for Provincial ADP 2020-21 at the size same as that of 2019-20 while allocating 85 percent for on-going schemes and 15 percent new schemes.

    “However, in a post Covid-19 scenario, with a reduction in federal transfers and funding for development, the total development outlay for Sindh for the next financial year 2020-2021 is proposed at Rs.232.9 billion, allocating Rs.155.0 billion to Provincial ADP and Rs.15.0 billion to District ADP schemes.”

    It would be pertinent to highlight that in this context Rs.54.6 billion are expected from Foreign Projects Assistance (FPA) and Rs.8.3 billion from Federal Government in Federal PSDP for 10 schemes under execution by Government of Sindh.

    The government had earlier decided to keep the size of development budget for the next financial year 2020-21 for important sectors such as Education, Health, Social Safety & Poverty Reduction and Water & Sanitation nearly same as that of 2019-20. In exceptional cases such as Health, allocation has been increased from Rs.13.50 billion to Rs.23.50 billion in order to meet the challenges of COVID-19 situation.

    The throw-forward amount in Provincial ADP 2020-2021 for 2209 schemes has reached at Rs.564.00 billion as compared to Rs.606.0 billion for 2705 schemes in 2019-2020.

    Keeping in view above non-development and development expenditure priorities, the major milestone of our objectives are:

    1. Exercise maximum austerity measures in our non-development expenditures.

    2. Provide maximum resources for Health sector.

    3. Enlarge substantially our social protection net through increased cash transfers to poverty inflicted people.

    4. Provide ways and means for employment generation as well sustaining economic activity for the poorest of the poor, in rural as well as urban areas.

    5. Continuing our focus on education, through increased allocations in financial year on development and non-development, despite huge resource constraints.

    6. Fashion our development spending in sync with the above mentioned post Covid preferences with increased focus on Public Private Partnership (PPP) projects.

    During his speech the chief minister said that the provincial government had decided not to introduce new tax in the budget 2020/2021.

    Further, in order to provide relief the salary of provincial government employees has been increased by 10 percent for grade 1-16 and five percent for grate 17 and above.