The Friends of Business and Economic Reforms (FEBR) has welcomed the reduction of customs duties on 40 raw materials of various industries, besides lowering this duty on 90 tariff lines from 11 percent to 3 percent in the federal budget 2020-21.
President FEBR Kashif Anwar observed that the government should be appreciated for extending tax exemptions despite economic difficulties created by the spread of Covid-19.
He, however called for immediate rectification of anomalies in the federal budget in due consultation with the real stakeholders including all major trade bodies. He observed that the FEBR was expecting withdrawal of discretionary powers of FBR officials which have been the major hurdles in tax net improvement. By enhancing discretionary powers of the tax officials another flood gate of corruption has been opened besides creating troubles towards documentation of economy, he added.
Kashif Anwar noted that the government has reduced federal excise duty on cement from Rs2 per kg to Rs1.75 per kg, which will reduce the price of cement and boost construction activities. He also appreciated the government decision to not impose any additional taxes in the budget.
He said that income tax relief measures and deletion of Withholding Taxes will augment efforts towards simplification of the withholding tax regime. This measure would reduce the cost of the compliance of taxpayers, besides promoting ease of doing business.
“Enhancement of threshold for becoming prescribed person for Withholding of Tax on Supplies, Services and Contracts from fifty to hundred million rupees and a similar threshold of hundred million rupees was prescribed for a sales tax registered person to become a withholding agent.
The FEBR President said that reduction in Holding Period and Tax Rates for Capital Gain on Immoveable Property to incentivize and propel economic activity in the real estate sector, the bifurcation of plots and constructed property for determining holding period of capital gains was done away with. In addition, rates were also reduced on capital gains emanating from disposal of immoveable property.