Steps To Generate Additional Revenue Finalized
Monday, September 27, 2010
The government on Saturday finalised taxation measures including imposition of 10 percent income tax surcharge and 1.5 percent flood disaster duty on imports to generate additional revenue to meet the urgent needs of flood affected people, sources told Business Recorder. They said a special meeting in this regard was convened at the Ministry of Finance to discuss and finalise these measures.
The 10 percent income tax surcharge would be applicable on already deducted tax and withholding tax withheld at different stages. The import surcharge would be imposed in the form of additional duty on wide range of non-essential and luxury items under Pakistan Customs Tariff.
The meeting also deliberated upon available options - issuance of presidential ordinance or approval from the Parliament - for imposition of reformed GST from October 1. They said it is not required to take approval from the Parliament as far as revised expenditures are concerned and the Ministry of Finance has the power to approve them.
They said the Ministry of Finance takes additional expenditure, if required during the year, and submits demands for supplementary grants before the Parliament for its approval along with next fiscal year budget. However, the Cabinet and parliamentary committees on finance are regularly informed about additional expenditure during the on-going fiscal year.
As far as additional revenue generation is concerned, they said some would be generated through issuance of SROs and some promulgation of presidential ordinance or approval of the Cabinet. They said that imposition of 10 percent income tax surcharge would not require promulgation of presidential ordinance as this would be done simply by issuance of Income Tax Statutory Regulation Order (SRO) with the approval of the Finance Ministry.
The 10 percent income tax surcharge is estimated to generate additional revenue of around Rs 55 billion. According to sources, it is expected that the government may issue ordinance for imposition of 1.5 percent flood disaster duty on non-essential imports. The duty is estimated to generate additional revenue of Rs 11 billion for the flood affected population of the country.
The proposed presidential ordinances regarding imposition of reformed GST and 1.5 percent flood disaster duty may be placed before the next session of the National Assembly from where these would be referred to the parliamentary committees of finance to obtain formal approval. The meeting was of the view that presidential ordinance was the appropriate option owing to time factor following commitment with the International Monetary Fund (IMF) to impose the reformed GST from October 1. Presidential ordinance may be issued soon after the prorogation of the current session of the National Assembly on October 8.
Labels: Income tax
posted @ 10:51 AM,
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