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6: The FBR has rescinded SRO.564(I)/2006 whereby sales tax was charged on sugar at the rate of Rs. 28.88 per kg.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7: The FBR has withdrawn sales tax zero-rating facility on plants, machinery and equipment by amending the SRO.549(I)/2008. The sales tax exemption has been withdrawn on fertilizers, pesticides and tractors. The FBR has also withdrawn sales tax exemption of input tax on agricultural tractors.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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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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