ISLAMABAD: The government has proposed one percent tax relief for the companies in budget for fiscal year 2015-16, bringing it down from current 33 per cent to 32 per cent.
Presenting the budget speech in the Parliament on Friday, Minister for Finance, Senator Muhammad Ishaq Dar said that the step was taken to promote and encourage corporate culture and documentation of the economic activities in the country.
He said that government had introduced a policy to reduce annual tax ratio of the companies by one percent and had reduced tax from 35 percent to 30 percent.
He said that last year it was brought down to 33 percent which has further been reduced by 1 percent and set at 32 percent which would encourage trade sector.
The minister said that government has also proposed income tax exemption on profit of electricity transmission lines projects for 10 years which was aimed at encouraging private sector to invest in power sector to overcome energy issues in the country.
To encourage the saving and promote investment in the country, the government was providing tax credit on shares for listed company in stock exchange; its limit was increased from Rs 1 million to Rs 1.5 million, he said.
Ishaq Dar said that government has also proposed to reduce advance income tax on token tax of vehicles from 20 percent to 25 percent, adding that in order to increase the operation of small companies in the country, capital for small companies was also increased from Rs 25 million to 50 million.
In budget 2015-16, the government has also proposed relief for small tax payers and salaried class.
In order to provide relief for salaried class whose taxable income was Rs 400,000 to Rs 500,000, the government has proposed to reduce tax ratio from 5 percent to 2 percent.
