ISLAMABAD: The government has introduced a new category of “Late Filers” in the income tax law under the Finance Bill 2024.
Earlier, income taxpayers were placed in two categories, Filers and non-Filers. Now, a new category of “Late Filer has been created which will attract higher rate of tax for late filing of income tax return. This measure will enforce timely filing of tax return.
In order to safeguard from higher rate of withholding tax and normal tax, it is imperative that individuals and association of persons are given more time for filing of their tax returns after close of financial year on June 30.
Major changes in tax laws expected through Finance Bill 2024
Another significant amendment is withholding tax regime of property transactions wherein slabs have been introduced according to the value of property. The highest slabs for filer would be 4% where value exceeds Rs 100 million.
Whereas highest slab for late filers will be 8% .The related measure is higher tax rate of 15% on gain from sale of immovable property acquired on or after 1st July 2024 regardless of holding period. This will discourage the investment in immovable properties and may shift the surplus funds either to bank schemes or stock market which will be beneficial for the economy as well.
Explaining Finance Bill 2024, a tax expert explained that recently, SIMS of non-filers were blocked but the same has not resulted into any compliance or increase in revenue.
Now more stringent measures are intended which include bar on foreign travel with exception from Hajj and Umrah travels, minors, students and overseas Pakistani. Such a restrictive and punitive measure is unprecedented in the tax history of Pakistan.
Another significant amendment is intended in respect of exporters. Since 1991 there was final tax regime for exporters and 1% tax collected by the banks on realisation of export proceeds was final discharge of tax liability. Now it is proposed that the exporters will pay tax at normal rate on their income.
Whereas, 1 percent tax deducted by a bank would be minimum tax. These measures will attract strong criticisms from the exporters as they are already facing challenges of higher cost of energy as compared to other countries in the region, tax expert added.
Copyright Business Recorder, 2024