Finance bill: Asad Umar announces to end tax rebate for PM, ministers

ISLAMABAD: Finance Minister Asad Umar presented the Pakistan Tehreek-e-Insaf (PTI) government’s amendments to federal budget 2018-19 in National Assembly session on Tuesday.

During his speech, Finance Minister Asad Umar said the previous PML-N government presented its sixth fiscal budget, which was in sharp contrast to ground realities. Consequently, he said, the current government felt the need to present a supplementary budget.

SALIENT FEATURES

Rs. 92 billion will be recovered through the use of modern technology and not increasing the taxes on individuals

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Non-filers can buy property now but on a higher (registration ) rate

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20% duty on 1800cc cars

Ratio of income tax maintained on salaried persons getting up to Rs.200,000 per month

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For income more than 2400000, 29% highest tax rate for non-salaried and 25% for salaried people

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For PM, Ministers and Governors, exemptions from tax ( on housing allowance, conveyance and some other allowances ) withdrawn

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CPEC will be the government’s priority

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50 billion for the development of infrastructure of Karachi (public private partnership projects)

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Total development funding 725 billion in 2018

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Petroleum development levy which was increased from Rs189 billion to Rs300 billion, will be capped at 189 billion, on the earlier level

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8276 houses to be built for the laborers, 4.5 billion allocated

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Total revenue target of FBR 4390 billion

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Super tax maintained

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Tax on cigarettes increased from Rs. 1 to Rs10 per pack

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Withholding tax on banking transactions for non-filers to be maintained

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Sehat card to be issued soon in Islamabad and Punjab.

Asad Umar announced that contrary to media reports, the government is not burdening the tax payers or low income class and the increase in income tax will only affect the upper class.

“The previous government announced income tax relief for people belonging to all social stratas but we have decided to tax the upper class but the lower income groups will still be relieved of the tax as there is no taxation until you earn more than Rs 12,00,000 per annum,” said Umar.

Asad Umar said that the government is removing the petroleum levy imposed by the previous government while increasing the duty on expensive smartphones and luxury cars.

“I was astonished to learn that a cigarette packet which costs 50 to 60 dollars abroad is being sold for sometimes less than a dollar in Pakistan. Why we are selling this poison so cheap, so we have decided to increase taxation on all tobacco products,” said the minister.

He maintained that smartphones, only the expensive ones, will be taxed while government is increasing the federal excise duty on luxury cars (more than 1800cc) by 20 per-cent.

In what he termed a revolutionary measure, the finance minister announced ending the tax rebate for ministers including the prime minister and governors of all four provinces.

Development budget

Presenting the development budget, the minister announced that the government plans to build Diamer Bhasha and Mohmand dam in record time while Rs 50 billion will be spent on development projects in Karachi.

Asad Umar also made it clear that, contrary to some media reports, the government has not decreased the development budget allocated for projects related to China Pakistan Economic Corridor (CPEC).