Highlights of Punjab tax relief package; sales tax exempted on insurance, medical treatment

Highlights of Punjab tax relief package; sales tax exempted on insurance, medical treatment

LAHORE: The Punjab government has announced a tax relief package amounting over Rs56 billion in the budget 2020/2021.

Punjab Finance Minister Makhdoom Hashim Javan Bakht on Monday presented the highlights of the relief package to be provided during next fiscal year.

The highlights of the tax relief package are:

01. rate of sales tax on services has been reduced to zero rated on health insurance and doctors’ consultancy fee and hospital from next fiscal year. The existing rates are five percent and 16 percent.

02. Sales tax rate has been reduced to 5 percent from 16 percent on over 20 services, which are included hotels, guests houses, marriage halls, lawns, caterers, IT services, tour operators, property dealers, rent a car service, cable TV operators, treatment of textile and leather, commission agents of commodities, accounting and tax consultancy services, auditing, photography and parking services etc.

03. Tax rates of Rs50 per square feet and Rs100 per square feet have been proposed on property builders and developers. However, those pay tax as developers and builders will be exempted from construction services tax.

04. Restaurants and beauty parlors will charge 16 percent tax from customers paying in cash and five percent in case payment made through credit card.

The minister said that in the next fiscal year property tax may be paid in two installments. However, those who make full payment by September 30, 2020 would be entitled for 10 percent rebate instead of five percent rebate.

He said that entertainment duty has been reduced to five percent from 20 percent. Further, all cinema houses have been exempted from entertainment duty till June 30, 2020. Furthermore, the new valuation table for property tax has been deferred for one year.

The minister said that those who make full payment of vehicle registration and token tax would be entitled for 20 percent rebate instead of 10 percent rebate. Further, those persons paying through Punjab e-portal will gent special five percent discount.