LAHORE, June 3: The Central Board of Revenue (CBR) has allowed drastic reduction in the general sales tax on traders by decreasing the rate of tax and introducing the slab system.

Pakistan Qaumi Tajir Ittehad president Azhar Saeed Butt said this at a press conference here on Sunday.

He said the rate of tax for annual sales up to Rs5 million had been cut from 0.75 per cent to 0.5 per cent. One per cent tax would be charged for sales from Rs5 million to Rs10 million instead of two per cent.

Tax for sales exceeding Rs10 million had been reduced from three per cent to 1.5 per cent under the new system.

Mr Butt said a trader with the gross annual sale of Rs15 million was required to pay Rs450,000 tax under the old system. He would now have to pay only Rs150,000 — Rs25,000 for the first Rs5 million, Rs50,000 for the second Rs5 million and Rs75,000 for the third Rs5 million.

He said the new sales tax formula had been agreed in the meeting between a QTI delegation, led by him and Central Board of Revenue Chairman Abdullah Yousaf, at Islamabad on Saturday.