ISLAMABAD: The Federal Board of Revenue (FBR) is considering levying a tax on ‘expensive gifts’ given by taxpayers to non-family members after wealthy Pakistanis gave away Rs102 billion under the scheme last tax year.
The gifts to family members are still proposed to remain exempted from income tax, according to a budget proposal of the FBR for the fiscal year 2018-19, starting from July. The money that a taxpayer will show as gift from or for non-family members in his wealth statement would be treated as his income, according to sources in the FBR. The amount will be charged at standard income tax rates, according to the sources.
The gifts valuing above a minimum threshold should be subject to the tax, said the sources. The proposal was to fix the minimum taxable limit of a gift in the range of Rs1 million to Rs1.5 million, the sources said. The budget proposal still has to go through final scrutiny.
The FBR is currently in the process of scrutinising tax proposals that will be announced in the budget to be unveiled on April 27. However, it faces challenges to keep its tax collection intact, as the government plans to offer major reliefs ahead of general elections.
Special Assistant to Prime Minister on Revenue Haroon Akthar Khan has said that the government would not levy a new tax in the upcoming budget. But the tax on gift will be deemed a new tax.
