Islamabad, June 19 (Agency) Pakistan government is looking for new avenues to increase burden on the rich and may impose taxes on gifts, jack up rates for corporate and salaried sectors, local media reported on Sunday. Other measures, like allowing unconditional import of gold to bring it into the tax ambit, are also being considered to bridge gaps with the International Monetary Fund before the end of the month, reports Express Tribune. The Finance Bill 2022-23 that Miftah Ismail, Pakistan finance minister, tabled in the National Assembly on June 10 may undergo some major changes to raise maximum taxes from the rich. In addition to finding more sources of income to the satisfaction of the IMF, the government also wants to give a message to the less-privileged classes that the elite class is also paying more than usual annual tax contributions, the report said citing sources.
One of the active proposals is to allow unconditional import of gold and start collecting taxes at the import and their domestic sales, according to the sources. The general import of gold is banned in Pakistan and the Import Policy Order links its imports with the condition that “importer shall arrange his own foreign exchange for the purpose”. Miftah wants to impose 2% customs duty and 2% adjustable income tax on the import of gold, according to the sources. He wants 3% sales tax on the retail stage of gold and silver. In addition to that, there is also a proposal to charge 1% withholding tax on sale of gold by the consumers at the jewellery shops. Pakistan’s Federal Board of Revenue has estimated the annual cost of gifts at around Rs 1.2 trillion and a major portion of it can be taxed by limiting the definition of the relatives who can exchange tax-free gifts. According to another proposal, the income tax rate for both salaried and business individuals can be steeply increased for those who earn over Rs1 million a month.
There are hardly 12,000 people who have declared their monthly income of over Rs1 million with the FBR, reports Express Tribune. Citing sources, the report added that the FBR was again considering the proposal to levy windfall tax for certain sectors by increasing their corporate income tax rate from current 29% to 32% and in some cases to 35%. The sectors that are on the radar of the government are steel, food, edible oil, automobile, gas and exploration firms, oil refineries as well as marketing companies. As an alternative, the minimum income tax rate for these sectors could be increased to 1.5% against the standard rate of 1.25%.