On Wednesday, the National Assembly approved an amendment to the Finance Bill 2022 that will allow the government to increase the fuel levy to Rs50 per liter.
During the National Assembly session held to discuss the amendments to Finance Bill 2022, Finance Minister Miftah Ismail made it clear that the amendment grants the government the authority to impose a tax of no more than Rs50 per liter. The levy will not be implemented instantly, he said.
He went on to say that the levy had been temporarily kept at zero by the government. Throughout the upcoming fiscal year, the levy will be gradually implemented.
According to The News, about 80 per cent of the amendments to the finance bill, according to State Minister for Finance and Revenue Ayesha Ghous Pasha, were tax-related.
She emphasised that the government’s objective was to burden the wealthy while sparing the rest of us.
The participants also agreed to impose a 5 per cent tax on the services of IT and software consultants in addition to the collection of sales tax through shopkeeper utility bills.
Additionally, a change to revoke the salary class’s relief was approved. Individuals earning between zero and Rs600,000 annually would not be subject to income tax, per the initial budget proposals (where salary income exceeds 75 per cent of taxable income). The following slab would have had a nominal deduction of Rs100 per year (those earning between Rs600,000 and Rs1.2 million per year).
With the new rates, those making between Rs0.6 and Rs1.2 million annually will now be required to pay 2.5 per cent in income tax.
Furthermore, a 10 per cent super tax on 13 high-income sectors was approved by the National Assembly. The 10 per cent super tax on large industries was announced by Prime Minister Shehbaz Sharif on Friday in his “bid to relieve the general public of tax pressures.”
“The revenue generated by this tax will be used to alleviate poverty in Pakistan, and it will be funded by high-income earners,” he said following a meeting with the government’s economic team.
The tax will be levied on the cement, steel, sugar, oil and gas, fertiliser, LNG, textile, banking, automobile, beverages, chemicals, and tobacco industries. Later, Miftah Ismail, the finance minister, added airlines to the list, bringing the total to 13 sectors.
Miftah went on to explain that the indirect tax (super tax) was intended to help the state accumulate funds under the heading of tax collection and reduce the budget deficit. He also stated that the fee was a one-time levy.
The government’s proposed 1-4 per cent super tax on high-income individuals’ salaries was also approved by the National Assembly.
The leadership levied a 1 per cent tax on those making up to Rs150 million annually, a 2 per cent tax on those making up to Rs200 million annually, a 3 per cent tax on those making up to Rs250 million annually, and a 4 per cent tax on those making up to Rs300 million annually.
Additionally, a change was approved that imposes a tax on imported mobile phones that ranges from Rs100 to Rs16,000 depending on their value.
Late Tuesday night, new amendments were added to the Finance Bill, 2022, including a potential reduction in the sales tax rate on the import of pharmaceutical raw materials from 17 per cent to 1 per cent, a tax exemption for theatres and production companies, and a change in the definition of “deemed rental income” by replacing the words “immovable properties” with “capital assets” and other changes.
Under the revised Finance Bill 2022, the FBR also decreased the capital value tax (CVT) on vehicles from 2 per cent to 1 per cent.