Finance Minister Asad Umar presented the third finance bill for the current fiscal year. Engineering community has shown satisfaction as necessary import items for industry are also being considered for the low regulatory duty. Duties on equipment brought to the Special Economic Zones (SEZ) have been abolished so now all equipment brought to the SEZs will now be duty-free. Duties on the import of diesel engines are reduced to 5%. Machinery for green field projects including renewables and solars is given exemption from sales tax, import duties and income tax.
The only item on which tax has been increased is import of vehicles with engine capacity of 1800CC and above.
Traders have appreciated the reforms undertaken in the Mini Budget. It is expected that this will boost growth and make it easier for the business community to do business.
Some important measures taken in this “Mini Budget” are.
1. Tax on income generated from loans to small businesses, agriculture sector and low-income housing to be reduced from 39pc at present to 20pc.
Introduction of interest-free revolving credit of Rs5 billion (qarz-i-husna)
2. Withholding tax on bank transactions waived off for tax filers.
3. Ban on purchase of vehicles for non-filers lifted for new locally manufactured cars up till 1300CC capacity, but higher taxes will apply.
4. Small businesses exempted from submitting withholding tax returns every month; will do so only twice every year.
5. Rs 20,000 fixed tax on marriage halls reduced to Rs5,000.
6. Pilot scheme to be introduced in Islamabad to facilitate traders in filing and paying taxes.
7. Duty on newsprint abolished completely.
8. Investment in solar panels and wind turbines to be exempt from duties and taxation for five years.
9. Reduction and abolishment (in some cases) of duties on raw materials to support export industries.
10. Super tax on non-banking companies to be abolished from July 1, 2019.
11. Continuation of 1pc per annum reduction in corporate income tax.
12. Capital loss carry-over to be allowed for 3 years (stock trading).
13. 0.02 per cent withholding tax on trading in stock market to be abolished.
14. Import duties on cars with engine capacity of 1800CC and above to be increased.
15. Taxes and duties on mobile phones rationalized: taxes on budget sets to be reduced, high-end sets to become more expensive.
16. Machinery for greenfield projects (including renewables) to be exempt of customs duty, sales tax and income tax (for five years)
17. Tax refunds to be worked out; promissory notes to be issued by mid-February.
18. Gas Infrastructure Development Cess to be removed from fertilizer production.
19. Duty on diesel engines for agricultural applications to be reduced to 5pc from current 17pc.
