Operation Zarb e Azb is long over but government to continue with Zarb e Azb super tax
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ISLAMABAD - Federal Board of Revenue (FBR) has stated that super tax imposed to finance Zarb-e-Azab operation will be withdrawn in different phases by fiscal year 2020-21.
A meeting of the Senate Finance Committee presided over by Farooq H Naek wa informed on Thursday by the Member (Policy Inland Revenue (IR) Dr Muhammad Iqbal that tax has been extended in the Finance Bill 2018 because rehabilitation expenditure on temporarily displaced persons (TDPs) are continuing.
Senator Talha Mehmood, mover of recommendation regarding withdrawal of super tax, argued that the tax was for specific purpose and as the operation has been concluded, the tax should have been withdrawn. He stated that reduction of super tax and gradual elimination of tax was proposed in the tax initially levied in Finance Act 2016 as one time levy.
In current Finance Bill it is again levied and extended up to fiscal year 2020 is causing incremental tax liability on large corporate having profits exceeding Rs 500 million. Senator Musaddik Malik said that as rehabilitation of TDPs is continuing and annual allocations are earmarked in the budget, the committee decided to propose to the government to reduce its period to fiscal year 2019-20 instead of 2020-21.
The finance committee also recommended to increase the threshold on foreign remittances to $150,000 from $100,000 after the June 2018 when the recently announced tax amnesty scheme to legalize the undisclosed assets and incomes expires.
Senator Talha Mehmood recommendations also included that additional custom duties for the last two years had been causing increase in manufacturing cost at the end of industrial undertakings. Raw materials are subject to said additional customs duty and they lead to incremental burden which cannot be passed on to end consumers.
