ISLAMABAD – Federal Board of Revenue (FBR) has stated that super taximposed to finance Zarb-e-Azab operation will be withdrawn in differentphases by fiscal year 2020-21.
A meeting of the Senate Finance Committee presided over by Farooq H Naek wainformed on Thursday by the Member (Policy Inland Revenue (IR) Dr MuhammadIqbal that tax has been extended in the Finance Bill 2018 becauserehabilitation expenditure on temporarily displaced persons (TDPs) arecontinuing.
Senator Talha Mehmood, mover of recommendation regarding withdrawal ofsuper tax, argued that the tax was for specific purpose and as theoperation has been concluded, the tax should have been withdrawn. He statedthat reduction of super tax and gradual elimination of tax was proposed inthe tax initially levied in Finance Act 2016 as one time levy.
In current Finance Bill it is again levied and extended up to fiscal year2020 is causing incremental tax liability on large corporate having profitsexceeding Rs 500 million. Senator Musaddik Malik said that asrehabilitation of TDPs is continuing and annual allocations are earmarkedin the budget, the committee decided to propose to the government to reduceits period to fiscal year 2019-20 instead of 2020-21.
The finance committee also recommended to increase the threshold on foreignremittances to $150,000 from $100,000 after the June 2018 when the recentlyannounced tax amnesty scheme to legalize the undisclosed assets and incomesexpires.
Senator Talha Mehmood recommendations also included that additional customduties for the last two years had been causing increase in manufacturingcost at the end of industrial undertakings. Raw materials are subject tosaid additional customs duty and they lead to incremental burden whichcannot be passed on to end consumers.