The Standing Committee on Finance of the National Assembly has approved a five percent withholding tax by setting an annual sales limit of Rs 20 million for unregistered shops and businesses.
The committee expressed serious reservations over the request for a 15-year tax exemption on new aircraft and their parts after the privatization of PIA and summoned Adviser on Privatization Muhammad Ali in the meeting of the standing committee.
In the meeting, FBR officials said that currently PIA has a one-year tax exemption on new aircraft and parts. Sharmila Farooqui opposed it and said that even a 5-year exemption is not appropriate, let alone 15. The Finance Secretary said that the IMF has also been consulted on this proposal.
The committee deferred approval of the proposed tax exemptions, giving the government the option to either withdraw the incentives or provide them equally to all airlines.
The finance secretary said that if the incentives are approved, the buyers will formally complete the deal by mid-July. The privatisation secretary warned that the deal could be cancelled if the government fails to provide the agreed tax incentives to the buyers.
The standing committee also approved the inclusion of 116 more items in the third schedule of the sales tax law, covering 21 different categories. The move is expected to earn the FBR Rs50 billion in additional revenue annually.
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