ISLAMABAD: In its budgetary proposals, the Federal Board of Revenue (FBR) is likely to recommend the government to grant exemptions and reduce the rates of duties and taxes on new industrial units.
“Currently, the FBR is not holding any kind of discussion to reduce duties / taxes on setting up of new industries and businesses. Such proposals are often considered during the budget exercise and any proposals for further reduction may be considered at the time of finalization of the Finance Bill, 2018,” official sources at the FBR told Customs Today explaining a question in this regard.
The sources named a number of tax concessions already available to investors on setting up new industries / businesses, adding that exemption from sales tax is available at the Special Industrial and Economic Zones.
“Similarly, plant, machinery and equipment imported for setting up fruit processing and preservation units in Gilgit-Baltistan, Balochistan and Malakand division up to the 30th June, 2019 have been granted exemption from sales tax,” the sources added. Plant, machinery and equipment imported for setting up industries in FATA up to 30th June 2019 have been granted exemption from sales tax.
The sources said that exemption from sales tax to machinery and items for mine construction, for Thar Coal Field, for power generation projects, power transmission projects, for marble, granite and gems stones extraction and processing industries had been provided.
“There is already tax credit under section 65D of the Income Tax Ordinance, 2001 for a company formed for establishing and operating a new industrial undertaking. The tax credit allowed is against the tax payable including on account of minimum tax and final taxes payable under any provisions of the Income Tax Ordinance, 2001, equal to the ratio of investment made from the company’s equity and total equity,” the sources maintained.
