ISLAMABAD: Pakistan on Friday introduced a fixed tax regime for jewelers and decided to impose the fixed tax on gold shops measures a certain area.
Finance Minister Miftah Ismail while addressing on the floor of the house, stated that only twenty two gold shops out of thirty thousand are registered.
“A fixed tax will be levied on the gold shops measuring up to three hundred square feet whilst sales tax on big jewellery shops has been reduced from seventeen to three percent,” the finance minister said.
He further said withholding tax on sale of jewellery has been reduced to one percent from the current four percent.
Ismail said a fixed tax will also be imposed on car dealers, restaurants and those constructing houses. He said the tax has been imposed on income and not consumption. Therefore, these measures will not cause inflation.
The minister said that the government has decided to levy super tax on the affluent class to reduce budget deficit in order to end reliance on foreign assistance and take the country towards economic sovereignty.
Winding up discussion on the budget for the next fiscal year, he said individuals and companies earning 150 million rupees will have to pay one percent additional tax, two percent additional tax on 200 million rupees income, three percent on 250 million rupees income and four percent additional tax on 300 million rupees income. He said this tax will be for a period of one year.
The Minister for Finance said that thirteen high earning sectors including oil and gas, cigarettes, cement, LNG terminals have also been identified for imposition of ten percent super tax on income of three hundred million rupees. He clarified that this will be one time tax.
Miftah Ismail said that there are nine million retail shops and it has been decided to bring 2.5 million of them to the tax net.
The Minister said after incorporating various suggestions and measures the tax revenue target has increased to 7470 billion rupees for the next fiscal year. He said 4373 billion rupees will be distributed to provinces as their share.
The Finance Minister said that the government has tried to reduce burden on the weak segments of the society. He said that sugar, flour and ghee will be provided to the people at subsidized rates throughout the year at the Utility Stores. He informed the House that one million people have so far registered to avail Sasta Petrol and Sasta Diesel scheme.
The Minister also announced incentives for different sectors. He said the condition of withholding tax and statement for IT companies with the revenue of less than eighty million rupees will be exempted. He said a tax being charged from Oil Marketing Companies at the rate of 0.75 percent has been brought back to 0.5 percent. He said Overseas Pakistanis having NICOP card will be included in the active tax payers’ list. He said income on the plots of the families of martyrs and war injured has been exempted from tax. He said relief has also been given to leather and surgical goods.
The Finance Minister said the government has safe the country from default and know the country will be taken towards development. He said the previous government took an unprecedented loan of twenty-thousand billion rupees in four years. He questioned how a country can remain economically sovereign by taking huge loan that is why we have to revive the stalled IMF program. He said difficult decisions were taken in the national interest after consultations with all the allied parties. He said given the current account deficit which will remain 17.50 billion dollars, we have to agree to the IMF recommendations to safe the country from default.
Miftah Ismail said that this is the most pro-farmer budget ever presented in the last two decades. He said this farmer friendly budget will accrue long term benefits for the country and help bolster agri-products, besides achieving self-sufficiency in edible oil, wheat and other crops.
Talking about recommendations made by the Senate, he said most of the suggestion of the Upper House has been incorporated. He said Senate’s recommendations on pharmaceutical goods will be entertained in the next budget.