ISLAMABAD: The National Assembly on Wednesday approved Finance Bill 2011 after amendments to certain laws such as bringing down GST to 16 percent from 17, abolishing 2.5 percent special excise duty and allowing five-year tax credit to investors intending to set up industry with their own capital.
The parliamentarians mindful of their perks and privileges have unanimously incorporated an amendment to "Salaries and Allowances Act 1974" to allow medical and other facilities to their former colleagues similar to a sitting parliamentarian from taxpayers money especially when the mover of the amendment, the finance minister, has been repeatedly reminding the nation about the financial crunch the country was facing.
The insertion of a new clause 13-A stated that "an ex-member who remained a member of either House of Parliament for at least one term shall also be entitled to such facilities as is notified from time to time and also entitled to medical facilities as is admissible to a sitting member.
The treasury benches rejected the amendments moved by the opposition members to reduce GST rate to 10 percent, increase income tax limit to 0.5 million, and opposed powers given to the Federal Board of Revenue to determine transit fee rate under Customs Act arguing that power to suggest rate lies with the Parliament.
Hafeez Shaikh said the government has incorporated 20 proposals of the 66 proposals forwarded by the Senate and the remaining would also be reflected in the economic policy in coming days. Responding to the opposition in support of their amendments, Hafeez Sheikh said GST would further be reduced after the completion of reforms in the existing sale tax regime. He said in view of inflation, the limit of income tax has been increased from Rs 300,000 to Rs 350,000 adding that ultimate beneficiary would be people of the envisaged measures for moving towards direct taxes by bringing 0.7 million identified persons into the tax net.
The government also incorporated an amendment to the Finance Bill with respect to tax credit for newly established industrial undertakings. The amendment states that "where a taxpayer being a company formed for establishing and operating a new industrial undertaking for manufacturing in Pakistan sets up a new industrial undertaking, it shall be given tax credit equal to 100 percent of the tax payable on the taxable income arising from such industrial undertaking for a period of five years beginning from the date of setting up or commencement of commercial production, whichever is later.
Tax credit under this section shall be admissible where; (a) the company is incorporated and industrial undertaking is set up between the first day of July, 2011 and 30th day of June, 2016; (b) industrial undertaking is managed by a company formed for operating the said industrial undertaking and registered under the Companies Ordinance, 1984 and having its registered office in Pakistan; (c) the industrial undertaking is not established by the splitting up or reconstruction or reconstitution of an undertaking already in existence or by transfer of machinery or plant from an industrial undertaking established in Pakistan at any time before July 1, 2011; and the industrial undertaking is set up with 100 percent equity owned by the company.