Islamabad, May 28 (IANS) Pakistan’s budget for fiscal 2010 beginning July 1 will levy fresh taxes of Rs.138 billion to mop up Rs.1,650 billion through various levies, a media report Friday said.
The proposals also include relief of Rs.5 billion on salaries and electricity consumption, Dawn said.
The proposals, prepared by a revenue advisory committee in consultation with the Federal Board of Revenue (FBR), envisages introduction of value added tax (VAT) from July 1.
Under the proposals, withholding tax on electricity consumption will be reduced from 10 percent to 5 percent in the highest slab, causing a revenue loss of Rs.4 billion.
Income tax rates for the salaried will be rationalised and the number of slabs reduced from 20 to 12. The maximum rate, applicable now on income of Rs.4.5 million and more, will be increased to 25 percent from 20 percent, while tax rates will be slashed for the Rs.250,000- Rs.900,000 income groups.
These steps will yield Rs.1 billion in additional revenue.
For non-corporate taxpayers, such as sole proprietorships, the rates will be rationalised and the number of slabs reduced from 14 to seven – ranging from Rs.200,001 to above Rs.3 million. The rates will range from five percent to 30 percent. There will be an average increase of Rs.500,000 from one slab to the next.
The basic threshold for non-corporate individuals will be raised from Rs.100,000 to Rs.200,000. This will yield Rs.2 billion in additional revenue.
All associations of individuals will be taxed at a flat rate of 25 percent, yielding Rs.3 billion.
Presumptive income tax on commercial importers will be increased from four percent to five percent, yielding an additional Rs.12 billion.
A withholding tax of five percent will be imposed on air tickets for domestic travel, to add Rs.2 billion to the exchequer.
A withholding tax of 0.3 percent will be charged on banking transactions of over Rs.25,000 in the form of cashier’s cheques, demand drafts, payment orders and telegraphic transfers.
The excise duty on cigarettes and filter rods will be increased to yield Rs.5 billion in additional revenue. The minimum price for cigarettes will be set at Rs.10 per pack of 10.
The 20 new services to be taxed by the FBR under VAT with revenue yields of Rs.82 billion include consulting engineers, architects, management consulting firms, practising chartered accountants and cost accountants, practising law firms, IT software companies, large real estate agents and developers, private security companies, large manpower recruitment agencies and authorised service stations for automobile companies.