Amendments to Finance Bill to be approved today

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ISLAMABAD: The National Assembly Wednesday (June 29) would approve the Finance Bill, 2022, with significant numbers of amendments including the imposition of 10 percent supertax on 13 sectors/industries announced by the finance minister after presenting the Budget-2022-23, it is learnt.

According to the sources, the government has proposed significant amendments including reducing the advance income tax on cellular services from 15 percent to around 13 percent and slashing the proposed duties on low-value handsets.

The amended Finance Bill, 2022, is entirely different from the one which was shared with the Lower House of the Parliament and the Senate Standing Committee on Finance. The original Finance Bill, 2022, has not mentioned a 10 percent “supertax” on 13 sectors.

In the budget for the financial year 2022-23, initially, the government had proposed exempting those earning up to Rs100,000 per month from paying income tax — increasing the limit from the earlier Rs50,000 per month.

However, after negotiations with the International Monetary Fund (IMF), the government has removed that exemption and eventually revised tax rates upwards for all slabs. For income below Rs600,000 per year (Rs50,000 per month) — no tax. But those earning Rs600,000 to Rs1.2m per year (Rs50,000 to Rs100,000 per month) will pay a tax of 2.5per cent of the amount exceeding Rs600,000. Similarly, tax would be increased who have higher salaries.

In budget (2022-23), the FBR has taken taxation measures of Rs440 billion with additional measures of over Rs350 billion, total measures now stood at Rs790 billion for 2022-23. The additional revenue of Rs466 billion is required to meet the upward revised revenue collection target of Rs7,470 billion for 2022-23.

The sources said the government also decided to impose a one per cent income support levy on people and companies earning Rs150 million a year, two per cent on those having an income of Rs200 million, three per cent additional rate has been proposed for the Rs250 million annual income earners and four per cent for Rs300 million annual income. In the budget, the government had proposed a two per cent rate for only those earning over Rs300 million a year and Rs38 billion in additional revenues.

Apart from this, the government has fixed the Rs750 billion petroleum development levy target for the next year and the government will impose a Rs50 per litre maximum PDL on petroleum products by March 2023.

The government may change the definition of resident Pakistani to include all those people in the tax net who do not stay in any foreign country for more than six months, after over 4,000 individuals having $2 billion in bank accounts turned out to be non-resident Pakistanis.

The government could amend the Income Tax Ordinance through the Finance Act, 2022, to plug a loophole which is often exploited by the rich Pakistanis to avoid tax payment, according to sources in the Federal Board of Revenue (FBR).

The pension budget has also been increased to Rs609 billion from Rs530 billion, running the civilian government to Rs600 billion from Rs550 billion after the IMF concerns as these have been understated in the budget. Sources said that the subsidy amount has also surged to Rs680 billion from Rs530 billion for next year.