Quick look at the big changes
The government plans to grow GDP by 4% in the next financial year, even though the economy has missed almost all major targets that were projected during FY19. For example, GDP grew by 3.3% compared to the target of 6.3%. Similarly, FY19 inflation is expected to reach 7% compared to the 5% target. This efficient government has utilized key economic participation mechanisms that have led to some success in helping the economy to grow and grow. For example, as a result of strong monetary and fiscal policy the current account was reduced to 4% in FY19 compared to 6.1% in FY18. Below are the major changes proposed in the state budget for 2019 – 2020:
Proposed Steps to Increase Revenue:
- · The concept of ‘filer‘ and non-filer ‘proposed to be abolished completely in the Income tax Ordinance, 2001
- · The Tenth Plan has been proposed to be included to provide a comprehensive framework for dealing with non-taxpayers including tax deduction / collection rates, income tax returns, assessments, etc. To force a net to bring them.
- · Purchase of immovable property with a market value of five million rupees or more and any other asset with a market value of rupees million or more, need to be transferred through a bank channel.
- · Significant changes in income tax on the sale of proposed fixed property.
- · By acquiring open land plots, if the holding period exceeds one year and does not exceed 10 years, the taxable income will be reduced by 25% and deducted from the normal tax. After 10 years, any money received will be released.
- · For assets generated when the administration period exceeds 1 year and does not exceed 5 years, the taxable income will be reduced by 25% and then subject to regular tax. After 5 years, any money received will be released.
- · Minimum taxable income has been reduced from PKR1.2mn p.a to PKR600k p.a for taxpayers and PKR 400k for unpaid people.
- · The bill suggested that a person would be considered a citizen of Pakistan if living in Pakistan was 90 days or more, instead of 183 days or more in any tax year and covered 365 days in the past four years.
- · Gifts other than those received from grandparents, parents, spouses, actual brother, actual sister, son or daughter will be tax deductible.
- · The foreign tax exemption limit under section 111 (4) proposes to be reduced to five million rupees in tax year from the current limit of 10 million rupees.
- · The Bill proposed amendments aimed at bringing about significant changes in respect of the following income tax, where the tax collected / payable on that amount should be treated as a small tax instead of a final tax –
- · Revenue from non-sales transactions
- · Proceeds from interest on debt (excluding company
- · Income from a non-resident person as a result of certain contracts and services
- · Revenue from the supply of goods
- · Revenue from contractual agreements with respect to sports person
- · The fee
- · CNG Channel revenue
- · Regular Tax Return of Taxes and 17% FED of Steel Industry on billets, ingots, bars, vessel plates etc.
- · The Bill proposes to seek a new appeal in subsection (99A) in which the profits and profits of the sale of property cannot be excluded from the Lease Exemption Rental Agreement until 30 June 2021.
- · Increase the price of gas offered by CNG dealers from PKR64.80 / kg to PKR74.04 / kg
- · Sales tax increase in sugar from 8% to 17% and increase in FED in Cement from PKR 75 / fund to PKR 100 / fund.
- · FED increase in cigarettes from PKR 700 to PKR 1000 per 1000 rods.
- · The increase in the tax rate on income from debt to 15-20% from the start was 10-15%.
- · Ice tax rates for companies accounted for 29% over the next two years.
- · Tax credit
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