ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Ishaq Dar here on Friday said that no new taxation measures were proposed in Federal Budget 2023-24 in order to provide maximum relief to the common man in the country.
Presenting the Federal Budget for fiscal year 2023-24 in National Assembly, he said that the measures proposed in the federal budget were aimed at enhancing livelihood opportunities by creating ease of doing business and encouraging industry and export promotion to achieve sustainable economic growth.
He said that the other objective of these proposed tax relief measures was also to enhance foreign exchange reserves, to strengthen the value of local currency against the dollar.
The minister said that the basic principle of tax policy for the current year was to encourage exports of IT and IT-enable services, besides promoting remittances for enhancing foreign exchange reserves.
Finance Minister said that the agriculture sector was the backbone of the national economy and the government has enhanced the limit of agriculture credit from Rs1,800 billion to 2,250 billion and 50,000 agri-tube wells would be switched over to solar energy.
The minister said that the government has also proposed to remove all taxes and duties on quality seeds and custom duty on the import of saplings. To avoid post-harvest losses and promote the use of combine harvesters, the import of harvesters was exempted from all taxes and duties.
In order to enhance rice output, the duties on dryers, rice planters, and seeders were also removed.
Besides, measures were taken to support local industry, encourage SMEs, and promote the agriculture and construction sectors. The minister said that the government has also proposed digitization of the economy in order to broaden the tax base and bring the elite class under the tax net and provide relief to inflation-hit people.
The minister said that a one percent increase in Withholding Tax on Services, Supplies, and Contracts was proposed, which would be applicable to individuals, associations of persons, and companies.
Further, the services which were included in Concessionary Tax were also proposed to have a 1 percent tax, however, added it would not be applicable to rice, cotton seeds, edible oil, print and electronic media, and support persons.
Ishaq Dar further informed that the scope and rate of Super Tax under Section 4C were aimed at to taxing the higher income people and imposed super tax during the tax year 2022 and enhanced it at the rate of 4 percent per annum.
Besides, he said that 15 high-income businesses and sectors proposed a super tax and income limit fixed at Rs150 million, adding that the Super tax was a progressive tax and it was also suggested to increase this tax rate gradually.
The minister said that the Withholding tax on commercial imports was proposed to enhance by 0.50 percent and the Withholding tax on the bonus shares of listed and non-listed companies by 10 percent.
The government has proposed a 0.6 percent tax on cash withdrawal by Non-ATL persons on cash withdrawals of above Rs50,000. Ishaq Dar said that the government has proposed to increase the General Sales tax (GST) on tire-1 retailers of leather and textile from 12 percent to 15 percent.
He said that in tier-1 retailers, the condition of the covered area was also abolished on the demand of the business community. He said that in 2005 duties and taxes were capped, adding that this capping condition was also removed. On the demand of local glass manufacturing association, and to protect localized glass the regulatory duty on such 15 types of glass increased to 30 percent.
To promote digitization payments in ICT areas, the tax ratio on the payments of hotel bills through credit cards was reduced from 15 percent to 5 percent.