ISLAMABAD, Pakistan: The Federal Minister for Finance Miftah Ismail has said that the government has decided to levy super tax on the affluent class to reduce the budget deficit in order to end reliance on foreign assistance and take the Country towards economic sovereignty.
Winding up discussion on the budget for the next Fiscal Year 2022-23, he said that individuals and companies earning Rs 150 million will have to pay 1% additional tax, 2% additional tax on Rs 200 million income, 3% on Rs 250 million income and 4% additional tax on Rs 300 million income for a period of one year.
The finance minister said that 13 high-earning sectors including oil and gas, cigarettes, cement, LNG terminals have also been identified for imposition of 10% super tax on income of Rs 300 million.
Miftah Ismail said that there are 9 million retail shops and it has been decided to bring 2.5 million of them to the tax net. He said that a fixed tax will be imposed on them.
The minister further said that only 22 gold shops out of 30,000 are registered, adding that a fixed tax will be levied on the gold shops measuring up to 300 square feet whilst sales tax on big jewelry shops has been reduced from 17% to 3%. He said that withholding tax on the sale of jewelry has been reduced to 1% from the current 4%.
The finance minister said that a fixed tax will also be imposed on car dealers, restaurants and those constructing houses. He said that the tax has been imposed on income and not consumption; therefore, these measures will not cause inflation.
The minister said that after incorporating various suggestions and measures the tax revenue target has increased to Rs 7,470 billion for the next fiscal year. He said that Rs 4,373 billion will be distributed to provinces as their share.
Furthermore, he said that the government has tried to reduce burden on the weak segments of the society. He said that sugar, flour and ghee will be provided to the people at subsidized rates throughout the year at the Utility Stores.
The minister informed the House that one million people have so far registered to avail Sasta Petrol and Sasta Diesel scheme.
While announcing incentives for different sectors, he said that the condition of withholding tax and statement for IT Companies with the revenue of less than Rs 80 million will be exempted. He said that a tax being charged from Oil Marketing Companies at the rate of 0.75% has been brought back to 0.5%.
The minister said that Overseas Pakistanis having NICOP card will be included in the active tax payers’ list.
Miftah Ismail said that income on the plots of the families of martyrs and war-injured has been exempted from tax. While a relief has also been given to leather and surgical goods.
The finance minister said that this is the most pro-farmer budget ever presented in the last two decades. He said that this farmer-friendly budget will accrue long-term benefits for the Country and help bolster agri-products, besides achieving self-sufficiency in edible oil, wheat, and other crops.
Talking about recommendations made by the Senate, he said that most of the suggestions of the Upper House have been incorporated. He said that Senate’s recommendations on pharmaceutical goods will be entertained in the next budget.