Breakup of revenue collection target of Rs 4,013 billion for 2017-18 revealed that income tax target has been fixed at Rs 1577.557 billion; customs duty Rs 581.371 billion; sales tax Rs 1605.200 billion and Federal Excise Duty target has been set at Rs 231.519 billion for 2017-18.
Through Finance Bill 2017-18, the government took additional revenue measures of Rs 120 billion and provided relief of Rs 32 billion so net addition in FBR's revenue has been projected at over Rs 87 billion in 2017-18. For stock market transactions, a flat rate of tax of 15% for filers and 20% for non-filers has been proposed through Finance Bill 2017-18. The rate of minimum tax for turnover is being enhanced from 1% to 1.25%. The government also introduced universal tax regime for capital gain tax and imposed tax rate of 15 percent for all slabs.
At present, upon enlistment of a company in the stock exchange, 20% tax credit for a period of two tax years is available on the tax payable by such company. In order to further incentivize the enlistment of companies on the stock exchange such tax credit is being extended for another two tax years, however, such tax credit shall be allowed @10% of the tax payable for each of these subsequent two tax years.
Presently, services rendered by Pakistan Stock Exchange Limited are subjected to 8% minimum tax which results in an effective tax rate which is much higher than the prevalent corporate rate of tax. To further improve the performance of the Stock Exchange it is being subjected to reduced rate of minimum tax @ 2% on its services. Currently the rate of advance withholding tax collected from stock exchange brokers is 0.02% and is adjustable. This withholding tax is now being made final tax in respect of such persons.
Copyright Business Recorder, 2017