Changes introduced in the tax laws through amendments to the Finance Bill will not have any major revenue impact as most of the amendments are procedural or legal while a rise in subsidies remains a major concern in case of inability to address the structural issues of the power sector, well-placed sources revealed to Business Recorder.
The government is likely to face a nominal revenue loss of around Rs 10 to 15 billion from the budgeted Rs 145 billion due to decrease in Gas Infrastructure Development Cess (GIDC) rate announced by Finance Minister Ishaq Dar in the winding up speech on general debate in the National Assembly.
Sources said impact of GIDC on revenue would have been higher if the cess rate had been decreased on fertiliser feed and natural gas. The reduction in sales tax from existing 16 percent to 10 percent on locally manufactured tractors would have revenue loss of Rs 1.5 billion. Through amended Finance Bill, the FBR has also reduced sales tax on imported 'Belarus Tractors' from 16 to 10 percent. The revenue loss at the import stage is comparatively less as compared to the local stage.
In budget 2014-15, the government imposed advance tax in adjustable mode on air tickets for travellers of first class/club class with filers to pay three percent and non-filers six percent. With the uniform rate of four percent on filers and non-filers alike the actual revenue impact would even out and the budgeted Rs 2 billion from this source is expected to be achieved.
Through amendments to the Finance Bill-2015, Rs 250 sales tax has been imposed on the SIM cards. Sales tax payable at the time of registration of a new International Mobile Equipment Identity (IMEI) was proposed @ Rs 250 as per the Finance Bill; however, as the same was not implementable due to non-availability of the system it is now proposed that Rs 250 be collected at the time of sale of SIM card by the cellular company. The intention of the government is to collect Rs 250 per SIM card or registration of new IMEI.
Sources said the FBR has also revised the procedure for collection of tax on bonds/shares issued by companies quoted on stock exchanges and those not listed. In this regard, separate procedures have been identified through amended Finance Bill (2104-15). The revenue impact from tax on bonus shares has been worked out at Rs 15 billion. Facility has been provided to steel melters, steel re-rollers and composite steel units, which may opt to pay tax in accordance with section 235B, for tax year 2012 and 2013, if tax liability for the said tax year is paid by June 30, 2014. It would have some positive impact on the estimated revenue from the steel sector.
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