Three New Ordinances Promulgated
Sunday, March 20, 2011
President Asif Ali Zardari on Tuesday promulgated three ordinances. Details are as under;
1:17 percent sales tax on
- fertilisers,
- agricultural tractors,
- pesticides,
- plants,
- machinery and
- equipment including its parts,
2: 15 percent income tax surcharge for Tax Year 2011 and
3: Raised special excise duty (SED) from 1 to 2.5 percent.
4: Federal Board of Revenue (FBR) has restricted the sales tax zero-rating facility of five export sectors -
- textile,
- leather,
- surgical,
- sports and
- carpets
to only registered manufacturers-cum-exporters or exporters for export purpose by amending SRO509(I)/2007.
5: The domestic supplies of these five zero-rated sectors will now be liable to sales tax at the standard rate of 17 percent.
6: The FBR has rescinded SRO.564(I)/2006 whereby sales tax was charged on sugar at the rate of Rs. 28.88 per kg. Now, the sales tax would be assessed on the actual market price of sugar. The rate of sales tax on sugar would remain unchanged at 8 percent. The assessable value of Rs 28.88 is creating a market distortion since ex-factory prices range between Rs 50 and Rs 60.
7: The FBR has withdrawn sales tax zero-rating facility on plants, machinery and equipment by amending the SRO.549(I)/2008. The sales tax exemption has been withdrawn on fertilizers, pesticides and tractors. The FBR has also withdrawn sales tax exemption of input tax on agricultural tractors. The Sales Tax (Amendment) Ordinance, 2011 has been issued to impose 17 percent sales tax on agricultural tractors.
8: One-time 15 percent income tax surcharge and raise in the SED from one to 2.5 percent respectively for the remaining period of the current fiscal.
9: The government would generate an additional revenue of Rs 53 billion through these fresh taxation measures in the remaining period of the current fiscal year.
10: The government has taken a number of measures to reduce its expenditure. These include a ban on the purchase of durable goods till July 1, 2011.
11: The government has also imposed a temporary ban on fresh hiring and recruitment. In addition, the government has totally banned capital expenditure and effected a 50 percent cut in travel and stationery budget. The cut in travel and stationery would help government save Rs 1 billion.
Labels: Economy and Business, Income tax, Sales Tax
posted @ 5:41 PM,
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