ISLAMABAD, June 22: The government has amended taxation laws through Finance Act 2006 by making adjustments in certain clauses to facilitate taxpayers besides revising the penalty quantum against defaulter or violators of tax laws.
Central Board of Revenue (CBR) chairman M. Abdullah Yusuf here on Thursday announced the amendments in a press conference which were incorporated in the taxation laws following proposals made in the National Assembly budget debate. A copy of amendments was made available to reporters following the briefing.
The government through the finance act exempted the rental income of a taxpayer, who was an individual or association of persons and derived income chargeable to tax under this section not exceeding Rs150,000 in a tax year and did not derive taxable income under any other head. Earlier, the government in the budget introduced fixed tax of 5pc on income from property with non-threshold.
An amendment was made in income tax for taxing at the rate of 2.5pc of income on the flying allowance received by pilots, flight engineers and navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority and junior commissioned officers or ranks of Pakistan Armed Forces. However, the senior officers were excluded from this levy.
Through the Act, withholding tax at the rate of 10pc on profit on debt was made the final discharge of tax liability of the taxpayers. However, the companies were excluded from the ambit of the presumptive tax regime (PTR).
According to the amendments, the government has reduced the withholding tax from 6pc to 1pc on import of computer hardware, parts and accessories; exemption has been given on capital gains arising from sale ships and all floating crops including tugs, dredgers, survey vessels and other specialised craft up to tax year ending on June 13, 2011.
The government reduced withholding tax to 1pc on import of gold and silver. Earlier, a reduced rate of Rs2 per 11.664 grams on import of gold and Rs5 per kg in the case of import of silver which was deemed to be full and final tax liability of the taxpayer.
Through the act, the government introduced 1pc withholding tax of turnover for a tax year of those retailers whose turnover exceed Rs5m and who was subject to special procedure for payment of sales tax at the rate of 2pc sales tax. With this the total rate would be 3pc of the declared turnover as envisaged in the sales tax rules.
An amendment was made to define the expression of ‘edible oil’ to include crude oil imported as raw material for manufacturing of ghee or cooking oil; exemption from provisions of section 150, 151 and 233 was extended to real estate investment trust (REIT) and the medical exemption available to a resident taxpayer up to Rs30,000 was withdrawn through the act.
Through amendments in the sales tax, the government allowed cases for resolution under alternated dispute resolution committee (ADRC) pending with the Supreme Court. Earlier, it was only allowed for those cases pending with High Courts. The government also allowed cost and management accountants to conduct audit of refund cases.
The government through the act enhanced the powers of appellate tribunals sitting singly to dispose of an appeal involving amount of taxes/penalty/fine of up to Rs1,500,000 as against the previous Rs500,000. Similarly, the appellate tribunals were empowered to refuse to admit an appeal in which amount of fine, penalty did not exceeds Rs500,000 as against Rs50,000.
