Government targeting tax scope expansion as the government is looking for new ways to increase burden on the rich.
Current decision may impose taxes on gifts, grow up the rates for corporate and salaried sectors as well as allow wholesale import of gold to bring it into the tax scope.
Other measures are also being considered to comfort the International Monetary Fund before the end of this month.
The global lender still perceives the government’s budget numbers unrealistic that require more taxation measures along with cuts in expenditures.
The Finance Bill 2022-23 that Miftah Ismail tabled in the National Assembly on 10th of June that may go through some major changes to raise maximum taxes from the rich.
In addition to finding more sources of income to the satisfaction of the IMF, the government also wants to give a message to the less-privileged classes that the elite class is also paying more than usual annual tax contributions, according to the sources.
The IMF has not yet shared the draft of Memorandum for Economic and Financial Policies (MEFP) with Pakistan, which Finance Minister Miftah has hoped can be shared anytime.
The MEFP becomes the base for a staff-level agreement on a set of measures needed to revive the programme and bring economic stability.
Where the government is set to enhance tax burden on the rich, it may partially reverse an earlier decision to increase income tax rate for commercial banks to 45% and instead bring it down to 42%, according to sources in the Federal Board of Revenue.
The FBR had proposed an increase in the cumulative income tax rate for the commercial banks to 42% from 39%, including super tax.
But the federal cabinet had increased the rate to 45%, which Prime Minister Shehbaz Sharif has now agreed to lower to 42%. Government targeting tax scope expansion.
There are 29,000 registered jewelers in Pakistan but only 22 have installed point of sales machines that are interlinked with the FBR system. Almost every jeweler encourages the buyers to pay in cash to avoid the tax net.
Miftah wants to impose 2% customs duty and 2% adjustable income tax on the import of gold, according to the sources. Government targeting tax scope expansion.
The trade with Russia and import of oil from Russia was also discussed.
He wants 3% sales tax on the retail stage of gold and silver. In addition to that, there is also a proposal to charge 1% withholding tax on sale of gold by the consumers at the jewellery shops.
