Foreign currency accounts: Finance Bill Amended

The Finance Bill 2018 has empowered the federal government to make procedure for governing deposits and withdrawals from the foreign currency accounts. According to the amendments introduced in the Finance Bill 2018 through amended Bill 2018, no cash shall be deposited in an account of a citizen of Pakistan, resident in Pakistan, unless the account holder is a filer as defined in the Income Tax Ordinance, 2001.
Under the amended Finance Bill 2018, the clause relating to "Health Levy on Tobacco" has been omitted from the Finance Bill 2018. In case of a banking company, super tax for tax year 2019 shall be payable, on estimate basis, by June 30, 2018, the amended Finance Bill 2018 said.
Through amendments in the Finance Bill 2018, tax payable on profits and gains derived by a person from low-cost housing projects shall be reduced by 50 percent. The reduction in tax liability under this clause shall apply to such project which is owned and managed by a company formed for operating the said project and registered under the Companies Act, 2017 and having its registered office in Pakistan and not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business. A low-cost housing project is the one where maximum sale price of a single housing unit is Rs 2.5 million.
The amendments in the Finance Bill 2018 revealed that the rock phosphate would be subjected to 10 percent sales tax if imported by fertilizer manufacturers for use in the manufacturing of fertilizers.
To safeguard government''''s revenues, it is proposed to charge sales tax on import of potassium chlorate at an additional Rs 40 per kg, besides standard rate of 17%. Provided that rate of Rs 40 per kilogram shall not apply on imports made by and supplies made to organizations under the control of Ministry of Defense Production.
The amendments made in the Finance Bill 2018 further reveal that where tax has been paid by the resident person on the income attributable to controlled foreign company and in a subsequent tax year the resident person receives dividend distributed by the controlled foreign company, after deduction of tax on dividend, the resident person shall be allowed a tax credit equal to the lesser of foreign tax paid on dividends; and Pakistan tax payable for the tax year in which the dividend is received by the resident taxpayer.