The government is likely to present the mini-budget through the promulgation of the Tax Laws Amendment Ordinance 2023 before the National Assembly session to be held on January 31, 2022.
The draft of the Tax Laws Amendment Ordinance 2023 contains new taxation measures of Rs 300 billion. After clearance from Finance Minister Ishaq Dar, the proposals have to get the approval of the federal cabinet.
The focus of the measures is to enhance the rates of different withholding taxes. This would help the Federal Board of Revenue (FBR) to immediately start the collection of revenue from February 2022.
The withholding tax on banking transactions of non-filers would fetch Rs. 45 billion. The 3 percent flood levy or regulatory duties/Additional Customs Duties would collect another additional revenue of Rs. 60 billion.
The proposed increase in the rates of capital value tax rates on imported and locally-assembled vehicles has been estimated to generate an additional revenue of Rs 10 billion.
The proposal to impose a tax on banks’ foreign exchange income has been estimated to generate Rs. 20 billion. The proposal to raise the federal Excise Duty (FED) on sugary drinks would generate Rs. 60 billion. The proposed impact of further raise in the FED on cigarettes has been estimated at Rs 25-30 billion.
The proposed increase in the rate of advance tax on the purchase/sale of immovable property would generate about Rs. 20-30 billion. The proposed withdrawal of sales tax exemption on the import of raw materials/inputs used in the manufacturing of export goods under the “export facilitation scheme” has a revenue impact of Rs. 20-25 billion.
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