ISLAMABAD: The federal government has allowed non-filers of income tax returns to purchase of locally assembled motor vehicles of any engine capacity.
Finance Minister Asad Umar in his speech on floor of the house on Wednesday while passing the Finance Supplementary (Second Amendment) Bill, 2019, said that in order to address the concerns of local manufacturers of motor vehicles, it has been proposed to allow non-filers to purchase locally manufactured vehicles irrespective of engine capacity.
He further said that as an additional tax incentive to encourage investment in the green field projects, it has been proposed to exempt business income of the green field industrial undertaking for a period of five years. Further it has been proposed to exempt such industrial underlings from minimum tax on their turnover.
As an additional measure, it has been proposed to exempt advance tax on profit paid on Pakistan Banao Certificate, Sarmaya-e-Pakistan Limited and Duty Drawback Bonds.
He further said that incentives had been proposed through Finance Supplementary (Second Amendment) Bill, 2019 for banks on advancing loans for agriculture, low cost and micro, small and medium enterprises. It has been proposed to further streamline these incentives.
Through the bill reduction in tax liability for inter-corporate dividend was proposed, he said and added that it has been proposed to exempt such dividend derived by a company if the company avails group relief according to the proportion of shareholding of the company.
The finance minister said that in the bill 10 percent federal excide duty was proposed for locally manufactured motor vehicles of engine capacity of 1800cc and above. However, in order to address the concerns of local manufacturers of motor vehicles, the proposed engine capacity is proposed to revised to 1700cc.
He said that in order to facilitate the exporters and other businesses, the outstanding sales tax refunds shall be liquidated through issuance of promissory notes or bonds by the Federal Board of Revenue (FBR). “It has now been decided that the proposed bonds shall be issued by the FBR Refund Settlement Company (Pvt) Limited, a fully owned company of the FBR.
In order to provide an additional incentive, import of plant and machinery by green field industrial undertaking has been proposed to be exempt from customs duty.
In order to provide further incentive to the industrial undertakings set up in the Special Economic Zones, exemptions from customs duty and advance income tax on import of firefighting equipment have also been proposed.