Tax laws changed to provide concessions to traders, reduce the duty on import of mobile phones
These amendments will apply to sales tax, customs duty, and income tax.
Changes have been made to the tax law by the government to implement promised concessions to traders, reduce the duty on import of low-value mobile phones and penalize currency smugglers.
The changes have been made through a presidential ordinance.
On 28th December 2019, the 24-page long ordinance was notified. It was made public on 1st January 2020 – the same day when the government arranged sessions of the Senate and the National Assembly.
These amendments will apply to sales tax, customs duty, and income tax. The rate of minimum tax has been reduced from 1.5pc to 0.5pc, in this case, the traders will have to turnover Rs. 100 million for the tax year 2020. The traders who have paid up to Rs.100 million tax in 2018 will have to pay a tax equal to or more than the tax paid for the tax years 2018, 2019 and 2020.
Traders, being individuals, will not be required to act as a withholding agent under Section 153 of the ordinance. The condition to qualify for a Tier-1 retailer has also been amended, so as to increase the threshold of electricity consumption from Rs.600,000 to Rs.1,200,000.
The customs duty was also cut down from Rs.730 to Rs.100 per mobile phone worth $30 to $100. Sales tax on mobile phones up to $30 has been reduced from Rs.130 to Rs.100 and on phones having value more than $100 from Rs.1,320 to Rs.200.
This ordinance has been issued to allow sharing of information between the FBR and Financial Monitoring Unit (FMU) to assist the latter to perform its job as stated in Anti-Money Laundering Act, 2010 and to ensure compliance with Financial Action Task Force regulations.
Penalties have been proposed to penalize people found to be illegally carrying foreign currency between $10,000 and $200,000 or above. There are varying degrees of penalties, from subtle fines to 14 years imprisonment.
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