Here’s Everything You Need to Know About the Mini Budget 2019

Finance Minister Asad Umar has presented the second mini-budget at National Assembly. He said that it was more of a reforms bill than a finance bill and that the government wants to ease the pressure on the poor while increasing taxation on the rich.

Tax Exemptions

• The minister announced to eliminate withholding tax on banking transactions for filers to encourage the tax-paying culture.
• Asad Umar announced that products for renewable energy will also be exempted from sales tax and customs duty for the next five years.
• Withholding tax on trading in the stock exchange will also be removed.
• Duty on import of newsprint paper has been eliminated as well.
• The government has also removed the tax on bids for sports franchises until they reach profitability.
• All machinery in special economic zones exempted from all taxes.
• New industries to be exempted from income taxes for five years.
• From July 1 super tax will also be eliminated for non-banking companies.

Reduction of Taxes

• The government has proposed a decrease of 20% on income tax from loans to SME and agriculture sector.
• Similarly, the government has cut the taxes on small marriage halls to just Rs. 5000 from Rs. 20,000.
• Reduction on import duty on raw material announced.
• Asad proposed to continue 1pc per annum reduction in corporate income tax.
• Non-filers can now buy houses of up to Rs. 5 million after paying excessive taxes.

Auto Sector

• Under the new finance bill, non-filers will now be able to purchase vehicles of up to 1300cc engine capacity after paying higher taxes. Non-filers will only be allowed to buy vehicles that have been locally assembled/manufactured.
• Tax increased for vehicles over 1800CC.
• A decline of five percent on duty announced on diesel engines for agricultural purposes.
• Regulatory duty is being removed on input materials (approximately 200 tariff lines) imported under SRO 655(I)/2006 dated 05.06.2006 that are used for manufacturing of auto parts by local vendors.

Telecom & Mobile Phones

• Taxes on low priced phones have been decreased. Meanwhile, expensive phones will be taxed at a similar rate. However, the scheme has been simplified into three taxes and slabs.
• Taxes on Imported Phones:
  • Rs. 150 Customs Duty on imported phones valued under $30.
  • Rs. 1,470 Customs Duty on imported mobile phones worth $30 to $100.
  • Rs. 1,870 Customs Duty on imported mobile phones worth $100 to $200.
  • Rs. 1,930 Customs Duty on imported mobile phones worth $200 to $350.
  • Rs. 6,000 Customs Duty on imported mobile phones worth $350 to $500.
  • Rs. 10,300 Customs Duty on imported mobile phones worth more than $500.
• Customs Levy on Imported Phones:
  • No Levy on imported phones valued under $100.
  • Rs. 500 levy on imported mobile phones worth $100 to $200.
  • Rs. 1,500 levy on imported mobile phones worth $200 to $350.
  • Rs. 3,500 levy on imported mobile phones worth $350 to $500.
  • Rs. 7,000 levy on imported mobile phones worth more than $500.
• Another slabbed tax has also been imposed on imported mobile phones:
  • Rs. 70 on imported phones valued under $30.
  • Rs. 730 on imported mobile phones worth $30 to $100.
  • Rs. 930 on imported mobile phones worth $100 to $200.
  • Rs. 970 on imported mobile phones worth $200 to $350.
  • Rs. 3,000 on imported mobile phones worth $350 to $500.
  • Rs. 5,200 on imported mobile phones worth more than $500.

Miscellaneous

• Easy loans will be given to the low-income sector for housing. A revolving fund of Rs. 5 billion introduced for this purpose.
• For furthering ease of doing business the frequency of monthly withholding statements has been done away with. Now businesses shall have to file biannual statements instead.
• Promissory notes for exporters, which will allow them to take loans from banks on the basis of these notes.
• It is proposed to allow Non-resident Pakistanis holding international passports can purchase any motor vehicle and immovable property without filing requirements.
• Relief for cancer patients as the existing exemption in the Sixth Schedule of the Sales Tax Act, 1990, relating to ostomy procedures for cancer patients is restrictive and lacks clarity. The exemption is now being linked to ostomy related appliances and items listed under PCT heading 99.25.

The complete draft of Finance Supplementary Bill, 2019 is given below:

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