Government announces relief measures

Tuesday June 23, 2009

ISLAMABAD: The government on Monday announced a major relief to exporters by declaring income tax collected on export proceeds as final discharge of liability, reduced withholding tax from four to three percent for industrial importers, abolished 'Carbon Surcharge' on CNG, replaced 16 percent sales tax on import of newsprint with five percent customs duty and abolished 20 paisa Federal Excise Duty (FED) on SMS with increase in FED from 19 to 19.5 percent on services provided by cellular companies.

Winding up the debate on the federal budget in the House, Minister of State for Finance Hina Rabbani Khar said the government has decided to revise the ad-hoc relief allowance for civil employees in BPS 1-16 from 15 percent to 20 percent. This revision would also be applicable to personnel of the Armed Forces in BPS 1-16 and equivalent who were earlier allowed only a 15 percent increase. Moreover, the ad-hoc relief allowance announced for old pensioners who retired ten years ago or earlier is being revised and they would now enjoy the benefit of 20 percent increase in net pensions.

Announcing other relief measures for business community through amended Finance Bill (2009-2010), she said that requirement of NTN or CNIC for sales to unregistered purchasers is being withdrawn; similarly, presenting of NTN for opening of bank account is being made voluntary or as per requirement of the bank concerned. Through another amendment in Finance Bill, the difference in the charge of additional tax on delayed payments and compensation on refund is being reduced to three percent from present about 12 percent.

The concept of third party audit by established and certified Chartered Accountant companies is being introduced. However, it is being ensured in the concept that it does not result in unnecessary harassment of business concerns.

The procedures relating to resolution of tax disputes is being further streamlined and simplified and all such proposals that were considered to be unnecessarily harsh and punitive like conducting raids on business premises without approval of FBR, are being withdrawn.

Sharing details of the tax-related amendments in the Finance Bill, she said that it was being proposed to lower the withholding tax from four percent to three percent for industrial imports to provide relief to manufacturers.

This involves a relief of over RS five billion to the manufacturing sector and would reduce their cost of production. Income tax collected on export proceeds is being made final discharge of liability of the exporters to facilitate export oriented activities and to enable exporters to compete more effectively in the international market.

On the demand of youth and children, additional Federal Excise Duty at the rate of paisa 20 per SMS is being withdrawn. The revenue loss would be compensated by increasing the additional FED on cellular services form 19 percent to 19.5 percent.

She also announced that since the government expects to wind up the National Accountability Bureau within the next three months, the budget for NAB is proposed to be reduced to Rs 183 million to cover 3 month's expenditure. The excess amount would be surrendered.

The government also announced reconstitution of Seventh National Finance Commission (NFC). The first meeting of the NFC would be convened in July 2009. The NFC deliberations would be completed at the earliest and hopefully within three months of the convening of the first meeting, she added.

She said the government has risen the PSDP eighty-five percent to the previous year's development programme, which is a record and would help improve the physical infrastructure and basic amenities of life. She said the government has been able to return back Rs 200 billion to the State Bank.

She said the inflation rate in October 2008 stood at 25 percent has now been reduced to 14.4 percent in May this year while food inflation stood at over 32 percent in October 2008 has also been reduced significantly.

She said the government has initiated Benazir Income Support Programme to check the poverty and allocations of this programme has been doubled and stood at Rs 70 billion. Referring to Minorities, the Minister said five percent quota for minorities in federal services has been fixed.


(BRecorder)