The new taxation measures of direct taxes would generate Rs 80 billion in 2013-14, including Rs 17 billion from enhancement in rate of minimum tax on turnover basis. It is learnt on Thursday that the revenue loss due to relief measures of direct taxes has been worked out at Rs 3 billion. The reduction in tax rate for non-banking companies would cause loss of Rs 3 billion.
The revenue measures and procedural/technical measures would generate Rs 83 billion. The net revenue impact has been estimated at Rs 80 billion excluding relief measures of Rs 3 billion. According to the revenue effect of budget (2013-14), the reduction in rate of Initial Depreciation would generate additional revenue of Rs 12 billion. The Federal Board of Revenue (FBR) would generate Rs 6 billion by encouraging corporatisation through withholding Tax Rates.
The rationalisation of withholding tax rate on cash withdrawal from banks would add Rs 6 billion. Other revenue generation measures revealed that the simplified procedure of assessment for builders and developers would generate Rs 5 billion; withholding tax on distributors and retailers Rs 5 billion; removal of exemption limit for withholding tax on National Savings Schemes, Rs 5 billion; revision of withholding tax registration of motor vehicles Rs 4 billion; withdrawal of exemptions in Second Schedule Rs 4 billion; rationalisation of rate of tax on Salaried Individuals Rs 4 billion; revision of tax rates for Property Income Rs 2 billion; withholding tax on functions in marriage halls and hotels Rs 2 billion; withholding tax on Margin Financing Rs 2 billion; rationalisation of rates of tax on business individuals Rs 2 billion; lump sum payment of Motor Vehicles Tax Rs 1 billion; taxation of dealers/arhtis registered with the market committee Rs 1 billion; withholding tax on foreign produced Films & TV serials Rs 1 billion; increase in rate of withholding tax on sale by auction Rs 1 billion; withholding tax collection on fees by educational institutions Rs 1 billion; enhancement in rate of tax on prize bonds Rs 1 billion and taxation on cable operators and electronic media would generate Rs 500 million in 2013-14.
On the relief side, the reduction in tax rate for non-banking companies would cause revenue loss of Rs 3 billion. Other relief measures which would have negative impact on revenue collection are; reduction of Minimum Tax for distributors of cigarettes working in the status of individuals and AOPs, extension in Income Tax Exemption from 5 years to 10 years in Special Economic Zones; rationalisation of rates of tax on goods transport vehicles; reduction in rate of withholding tax on import of hybrid vehicles and exemption certificate on import of raw material for own use by the manufacturers.
The taxation of Hajj operators would generate additional revenue of Rs 500 million. Other procedural and technical measures having positive impact on revenue are sales tax registered persons to be withholding agents; return filing by commercial and industrial consumer of electricity; obtaining information from banks; enhancement in rates of penalties; penalty for non display of NTN at business premises; credit of agricultural income; mandatory filing of wealth statement by all filers of returns; reduction in the limit for filing of wealth statements by salaried persons; directorate generals of research and development & law and streamlining audit would generate additional revenue in 2013-14.
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