ISLAMABAD: The federal government has announced to enhance limit in import of raw material by manufacturers without collection of income tax at the import stage.
Presently, the quantitative limit for import of raw materials by an industrial undertaking for its own use, without collection of tax at the import stage, is 110 percent of the raw materials imported and consumed in the previous tax year.
In order to promote industrialization and manufacturing the quantitative limit for import of raw materials by industrial undertaking, without collection of income tax at the import stage , on the basis of exemption certificate issued by the Commissioner, is being enhanced from 110 percent to 125 percent of the quantity imported and consumed in the previous tax year.
A tax credit of 3.0 percent of tax liability was made available to all manufacturers who make 90 percent of their sales to sales tax registered persons in order to encourage documentation and for facilitating entry into the formal sector, however, this incentive has failed to achieve its desired objective and has failed to contribute, in any meaningful manner, towards documentation. In this backdrop this tax credit is being withdrawn.
