ISLAMABAD: The government has launched a consultation to review the partial reversal of the proposed increase in income tax rates for salaried individuals and exporters and to phase in the proposed 18 percent sales tax on the sale of baby milk. did
The internal consultation is being carried out following criticism from all sections of society and businesses affected by the government’s proposed additional revenue measures of Rs 1.5 trillion but the outcome of the consultation will depend on financial capacity and the consent of the International Monetary Fund. .
The PML-N government has imposed heavy taxes in the budget to show a basic fiscal surplus, but it has not chosen the other option of reducing spending and limiting the number of ministries and spending. The proposed budget of 18.9 trillion rupees for the next fiscal year is 30 percent higher than this fiscal year, indicating that the ruling party is not willing to take a path that would anger its allies.
Sources told The Express Tribune that Finance Minister Muhammad Aurangzeb has raised the issue of taxing the salaried class with Prime Minister Shahbaz Sharif. Despite Rs 360 billion paid by the tax-burdened salaried class this year, the government is proposing to levy an additional Rs 75 billion in the next financial year, while the power price on industrialists will be increased. Despite reducing the burden by Rs 240 billion, the Prime Minister is facing pressure to reverse the decision to charge standard income tax rates to exporters.
Instead of collecting income tax from exporters at a fixed rate of one percent, it is proposed to increase it gradually. During the first 11 months of the current financial year, exporters paid a modest amount of Rs 85.5 billion, which is likely to increase to Rs 100 billion by the end of June. At a time when the government has hit almost every section of the society, especially the salaried class and the poor, by levying unduly heavy taxes on consumer goods, the exporters will not feel good about the income tax relief.
Saleem Mandviwala, Senator of the People’s Party and Chairman of the Senate Standing Committee on Finance, said that our party is against increasing the income tax burden on salaried individuals and exporters. The Standing Committee will reject both these proposals of the government. Also, the standing committee on Saturday recommended the government to revise its budget proposal to impose 18 percent sales tax on baby milk.
Chairman FBR Malik Amjad Zubair Towana said that we will talk to the finance minister about reducing the 18 percent sales tax that we have proposed.
Sources said the government has already informed the FBR that instead of imposing a one-time 18% sales tax on baby milk, it should implement it in a phased manner.
Sheikh Waqar Ahmed, Head of External Affairs, Nestlé Pakistan, said that the government has proposed in the budget to withdraw the zero rating facility available on the sale of baby milk to recover additional taxes of Rs 20 billion in the next financial year. . He said that after adding a new advance income tax of 2.5% on additional sales tax supplies, the GST on baby milk will be around 25% instead of 18%.
PML-N Senator Anusha Rehman said that a sudden 25% increase in the prices of baby milk will be disturbing for the people, so the sales tax should be increased gradually.
It should be noted that the government has proposed to impose 18% GST on canned milk to collect another 75 billion rupees. This will increase the price of a liter of milk from Rs 290 per liter to Rs 342 per litre.
The Standing Committee has approved the budget proposal to allow Pakistan International Airlines to adjust its deficit for the next 10 years.
Tehreek-e-Insaf Senator Mohsin Aziz opposed the special exemption for PIA, saying the government was giving hidden incentives to potential buyers of PIA due to the facility of adjusting future profits against past losses. There will be no need to pay income tax.
The committee also endorsed the government’s proposal to ban non-filers from traveling abroad.
Chairman FBR clarified that the ban on foreign travel will not apply to every non-filer, it will only apply to those who have been issued notices for filing annual returns.
The Standing Committee objected to the government’s proposal to introduce a new category of late filing of income tax returns and levy higher tax on them.
Senator Mandviwala said that by introducing the concept of late filers, the government is narrowing the way for non-filers by saying that you have a bigger asset by paying more than the filers but still less than the non-filers. can buy In the budget, the government has introduced three different income tax rates for filers, late filers and non-filers, with the highest rate for non-filers.
