LAHORE: Finance Minister Ishaq Dar has highlighted various tax relief and revenue rationalization measures proposed in income tax, withholding tax, sales tax, federal excise duty and customs duty regimes to achieve higher economic growth and development.
Talking to media, he said that in order to encourage corporatization, the corporate tax has been reduced to 31 percent for the tax year 2017 and will further come down to 30 percent in 2018.
He said in order to encourage the organized sector, tax credit, which is 20% at present on tax payable for enlistment in stock exchange and available for one year, is proposed to be made available for two years instead of one year.
The minister said in order to promote activity in the housing sector and meet the deficiency of available housing units, a current deductible allowance upto Rs1 million on payment of profit on debt for construction of a new house or acquisition of house, is proposed to be increased to Rs2 million.
In order to promote relief on education expenses, which are unbearable for low income groups, it is proposed that individuals having taxable income less than Rs1 million should be given tax relief equal to 5% of school fee upto Rs 60,000 per child per annum, he added.
The finance minister said at present a tax credit is available for contribution in an approved pension fund with a maximum of 20% taxable income. An additional contribution of 2% for persons above 41 years of age to a maximum of 50% of taxable income is available upto June 30, 2016, he added.
It is proposed that the period may be extended upto June 30, 2019 with the condition that the maximum tax credit be restricted to 30% of taxable income of the preceding year, he added.
The finance minister said to facilitate the low income group, it is proposed that the final tax on commission of income of life insurance agents may be reduced from the current 12% to 8% for the filers on commission receipts utpo Rs 0.5 million.
Dar said several measures have been proposed in the budget to save energy and promote alternative sources of energy.
He said these include concessions of customs duty on local manufacturing of LED lights, incentivizing import of items used in renewable sources of energy technologies, extension in relief on import of solar panels and exemption to dumper trucks for Thar Coal field.
Ishaq Dar said concession of customs duty for dairy, livestock and poultry sectors, concession of customs duty for fish farming, relief on cool chain machinery, exemption of sales tax on pesticides and exemption to Silos will also help a lot in revival of agriculture sector.
