ISLAMABAD: The withdrawal of tax exemptions through Statutory Regulatory Orders (SROs), increase in tax rates and other revenue measures are projected to generate an additional Rs235 billion in 2014-15 to meet the estimated Rs2,810 billion tax collections next fiscal year.
As per reports, the Ministry of Finance and the Federal Board of Revenue (FBR) have finalised budget proposals for 2104-15. The government is expected to withdraw tax exemptions granted through SROs to the tune of around Rs104 billion as committed to the International Monetary Fund under the $6.64 billion Extended Fund Facility.
The total impact of sales tax and FED measures are projected at around Rs70 to 75 billion. Sales tax measures have been estimated at Rs35 to 40 billion whereas FED measures would account for Rs35 to 40 billion. The remaining amount is expected to come from measures on the income tax side, expansion of withholding taxes and doubling of withholding tax rates for non-taxpayers and un-registered persons and enhanced documentation of economy.
According to reports, increase in the rate of Capital Gains Tax (CGT) from 10 to 17.5 percent on securities traded at the stock exchanges in budget (2014-15) is unlikely. The board is seriously reviewing a proposal to increase the CGT rate from 10 to 17.5 percent in a phase-wise manner. Under an arrangement agreed between the Dr Hafeez Sheikh-led Finance Ministry and stock exchanges, the rate of CGT would have to rise from 10 to 17.5 percent for financial year (2014-2015) on disposal of securities held for less than 6 months. Stock exchanges had proposed that the rate of CGT on disposal of securities may be kept unchanged at 10 percent (for holding period of less than six months) from fiscal 2014-2015 onwards.
