Budget FY14: No new tax being imposed, says Ishaq Dar

ISLAMABAD: Federal Finance Minister Ishaq Dar while presenting the budget 2013-14 in the National Assembly on Wednesday said it has been proposed in the next budget to decrease corporate tax by 1 percent each year.

Referring to tax proposals‚ the finance minister said being a nation we would have to take decisions to help make Pakistan self-reliant through off-loading debt and concentration of national economic priorities.

He said the government had decided not to impose any new tax on those who were already paying their share of tax. However‚ those who were not paying tax would be brought in the tax net and for this purpose new tax reforms would be introduced.

He said the revenue collection would be increased by making tax system easy and expanding its scope.

Steps will also be taken to overcome corruption and facilitate taxpayers.

Dar said it had been proposed in the next budget to decrease corporate tax by one percent each year and bring it to 30 percent in the next five years from the existing thirty-five percent.

He said tax exemption in special economic zones would be extended for up to 10 years.

He said two percent adjustable withholding tax had been proposed on the function held in hotels‚ clubs‚ marriage halls and restaurants.

“The minimum tax rate is being enhanced from 0.5 percent to
one percent of the annual income”.

The tax system for salaried persons would be rationalized according to the salaries they receive, said he.

“To rationalize tax on the business persons two slabs are being created under which tax rate from 25 percent will be increased up to 35 percent on the income of Rs6 million”, said he.

New ratio of withholding tax on business imports agreements supplies and services would be imposed to promote corporatization, Ishaq said.

“To ensure receipt of agriculture tax‚ it has been proposed that agriculture credit will only be issued to those growers who pay provincial agriculture tax.”

He said 5 percent additional sales tax was proposed to impose on unregistered industrial and commercial electricity connections.

The finance minister said in order to overcome revenue shortage it is proposed to increase stranded rate of sales tax from 16 to 17 percent. (PPI)