Government all set to generate additional PKR 120 billion tax revenue
the government will decrease sales tax from 17% to 10% on butter, cream, yogurt, cheese, tea whitener, and dairy powder.
The federal government has decided to take three substitute taxation measures to generate an additional PKR 120 billion through reformations to the Finance Bill 2021.
- The government may draw out the proposal of eliminating withholding tax on banking transactions. The withholding tax on banking transactions is assumed to be retained in 2021-22.
- It may increase 30% to 35% in the rates of the Federal Excise Duty on different slabs of cigarettes.
- The government has also decided to raise FED on drinks and aerated water.
Sources have revealed that the Federal Board of Revenue will suffer a revenue loss of PKR 100 billion following the withdrawal of the budgetary program to impose FED on mobile phone calls and SMS @ Re 1 per call (call exceeding three minutes) and Re 0.10 per SMS.
The government will also eliminate other revenue measures from the Finance Bill, 2021, having a revenue impact of PKR 20 billion. The exemption allowed to the inter-corporate dividend would be returned.
Moreover, the government will decrease sales tax from 17% to 10% on butter, cream, yogurt, cheese, tea whitener, and dairy powder.
As a consequence of the withdrawal of these revenue rules, the total revenue loss to the government would stand at PKR 120 billion. Therefore, the FBR will take other taxation measures to subdue this shortfall of PKR 120 billion.
What are your views on this? Share with us in the comments below.