Govt introduces 25 new amendments to finance bill

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ISLAMABAD: The government has introduced 25 new amendments to the Finance Bill 2017, most of them relating to income tax measures.

Of them, 12 amendments are related to income tax measures, 10 to sales tax and three to customs duty. These amendments were introduced following recommendations from senators and other stakeholders.

These amendments along with budgetary measures will come into effect from July 1.

The limit of agriculture loan for small farmers has been raised from Rs50,000 to Rs75,000 for one crop and the total volume of the loan could be Rs150,000 for two crops in a year. The minimum wage has been increased from Rs15,000 to Rs15,400.

Through the Finance Act of 2017, the government has reduced customs duty to 3pc from 20pc on parts of Peter agricultural diesel engine. This was in addition to the budgetary decision of complete sales tax exemption on agricultural diesel engines of between 3 and 36 horsepower.

The tax incentives package of information technology has been extended to IT-enabled companies as well. The government exempted the goods including plant machinery under various Islamic instruments like Murrabaha, Musawamah, Bai Muajjal, Bai Salam, Istisna, Tijarah and Istijrar from dual payment of sales tax.

The rate of tax has been further reduced to 1pc from 2pc for five export-oriented sectors — textile, leather, sport, surgical and carpet. The tamarind gum has also been declared zero-rated for the export-oriented sector.

To facilitate oil companies, the government has exempted the procedure to apply for exemption certificate for the import of oil. Withholding tax of 0.2pc and 0.5pc was exempted from distributors, dealers and wholesalers of batteries on recommendation of senators.

In the fertiliser sector, sales tax has been reduced to 10pc from 17pc on feed gas. On supply of LNG for feed gas, the sales tax rate has been reduced to 5pc from 17pc and supply of fertiliser has been exempted from further tax.

In the poultry sector, customs duty has been reduced from 20pc to 16pc and from 16pc to 11pc on all the materials used in the value-added sector. On the fish feed, the sales tax has been reduced to 10pc from 17pc.

For the manufacturers of direct-current (DC) fans, the customs duty has been exempted on import of permanent magnets; the tax rate on dividend income of up to Rs2.5m from mutual fund investments has been decreased from 12.5pc to 10pc, and the new rates of capital gains tax will not apply on securities purchased before July 1, 2016.

The tax on services of Pakistan Stock Exchange and Pakistan Mercantile Exchange has been reduced from 8pc to 2pc, for secondary market development, tax on listed derivatives has been reduced from 15pc to 5pc for a period of three years.

Tax on imports of raw plastic has been reduced to 4.5pc from 6 pc to avoid evasion while tax rate for industrial units has been reduced to 1.75 pc from 6pc.

Published in Dawn, June 14th, 2017

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