ISLAMABAD: Finance Minister Ishaq Dar Saturday categorically said the government has not announced any amnesty scheme for overseas Pakistanis and the new law of taxing windfall gains profits would be invoked against industries that exploit consumers to make extraordinary gains.

Responding to a question on (additional tax on certain income, profits, and gains) under new Section 99D of the Income Tax Ordinance 2001 at the post-budget press conference on Saturday, Dar stated that the provision would be invoked against the sectors which would put the unnecessary financial burden on their consumers.

“We have not identified sectors, but the tax would be imposed on those sectors or segments who would exploit their customers to make extraordinary gains,” he said.

The finance minister said that it was a well thought out decision and the tax should not be more than 50 per cent after the rationalisation of the super tax. The additional taxation of super tax would generate Rs31 billion in 2023-24.

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“Those segments who would unnecessarily exploit the general public to make gains would be subjected to this tax. And this amount collected from the consumers must come back to the national exchequer. This amount should be spent on the general public, Dar said.

The government would be empowered to invoke the provision of section 99D of the Income Tax Ordinance 2001 whenever required. The windfall gain tax will be imposed on those sectors earning extraordinary profits by exploiting their customers. In this regard, the FBR will have the necessary law available for enforcement.

Dar said the government has received requests from the entire business community to increase the monetary limit of foreign remittances remitted from outside Pakistan. This was a genuine and legitimate demand of the business community which should be supported.

The government has enhanced the monetary limit of foreign remittance remitted from outside Pakistan from five million rupees to rupee equivalent of US$100,000 for the purpose of section 111(4) which places a bar on asking nature and source of unexplained income/assets.

“The amendment in section 111 of the Income Tax Ordinance is not a new measure, but the section has been amended. The amendment in section 111 of the Income Tax Ordinance 2001 is not an amnesty scheme”, Dar said.

The finance minister stated that the FBR would be able to achieve the assigned revenue collection target of Rs9.2 trillion for 2023-24. The taxation measure of Rs200 billion has been taken to encourage documentation and put extra burden on non-filers and those operating in the informal economy.

Out of total taxation measures of Rs200 billion, the net income tax measures stood at Rs175 billion. Most of the measures would encourage documentation of the economy and removal of anomalies in the taxation system. The restoration of 0.6 percent withholding tax on banking transactions of non-filers is also a documentation measure.

He said that the government has not imposed nine per cent sales tax on processed milk in budget (2023-24). It was an old proposal which was not approved by the government.

Similarly, he dispelled reports that the sales tax has been imposed on the import of edible oil. The sales tax on the import of edible oil has not been abolished.

Dar stated that there was a customary practice of forming two committees within the Federal Board of Revenue (FBR) — one for business-related issues and the other for technical matters.

He said that the FBR chairman will obtain his approval on the matter, and the committees will be formed by Monday. “The purpose of these committees is to address any missed aspects and provide an opportunity for individuals with complaints or genuine recommendations to be heard and considered by the government.”

He said that the government would accept the viable recommendations of the Senate Standing Committee on Finance during the review of the Finance Bill 2023. The budget proposals would also be reviewed at the level of the National Assembly Standing Committee on Finance.

The Senate Standing Committee on Finance viable recommendations would be incorporated in the budget. As far as anomalies of the business community is concerned, the same would be removed on the suggestions of the business and trade, he added.

Dar said that there is a discussion going on about the reason behind the extension in tax exemptions to the units located in the erstwhile tribal areas. The Prime Minister had visited Peshawar and held a meeting with the business community and politicians in KP.

There was a strong demand for an extension in the income tax exemption for FATA/PATA residents until June 30, 2024. Under the Finance Bill 2023, the government has announced an extension in exemption on machinery and equipment imported by erstwhile tribal areas till June, 2024. Moreover, there is also an extension in the exemption of sales tax/income tax to merged districts of tribal areas for another one year ending June 30, 2024.

Copyright Business Recorder, 2023