An amendment to Finance Bill 2022 increases petroleum levy

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An amendment to Finance Bill 2022 increases petroleum levy
An amendment to Finance Bill 2022 increases petroleum levy

A new super tax was also approved by the National Assembly, rescinding relief granted to salaried and middle-class households

The National Assembly on Wednesday approved the amendment to Finance Bill 2022 that gives the government the authority to raise the petroleum levy by up to 50 Rs for each litre.

In speaking during the National Assembly session that met to discuss amendments to the Finance Bill 2022, Finance Minister Miftah Ismail clarified that the amendment allows the government to impose a maximum of Rs.50 per litre as a levy.

“(However) I can’t think that the levy could go up to Rs.50 any time soon.”

He also said that the government has kept the tax to a minimum.

In the session, the state minister for finance Ayesha Ghous-Pasha said that almost 80% of the amendments to the finance bill had to do with taxes.

Must Read: IMF ‘Suggests’ Pakistan to Introduce Multiple New Taxes

She also reiterated the goal of the government to raising taxes on high-income earners while helping the rest of population.

In addition, the participants approved the tax collection through bills for shopkeepers’ utilities and the imposition of 5% tax-on the IT services and software consultants.

A proposal to repeal the relief offered to the salaried class was passed.

In the original budget plans the income tax would not be imposed on people (where the income earned by an individual from salary is greater than 75% of the taxable income) who earn between 0 and Rs.600,000 . year. In the next level (those that earn between Rs.600,000 to Rs.1.2 million annually) A small amount of Rs.100 could be deducted each year.

Under the new rates, those earning Rs0.6-Rs1.2 million annually would be now liable for 2.5 per cent income tax.

In addition in addition, in addition, the National Assembly also approved 10 super tax at a rate of 10 percent on high-earning sectors in 13 industries. On Friday the The Prime Minister Shehbaz Sharif announced a 10 percent poverty alleviation tax (also known as supertax) on major industry as part of his “bid to ease the general population of tax burdens”.

“The money raised through this tax would be utilized to help alleviate the poverty of Pakistan as well as be paid by those who earn the highest income,” he said after an interview with the economic team of the government.

This tax is imposed on steel, cement sugar, cement as well as gas and oil, fertilizer LNG, textiles, automobiles, banks tobacco, chemicals and other sectors. In the following days, Finance minister Miftah Ismail has also mentioned airlines among the industries included on the list, bringing the total number of 13 industries.

Miftah explained on how the tax indirect (super tax) is aimed at helping the state to accumulate funds for tax collection, and to reduce the deficit in the budget. He explained that the tax was a single-time tax.

Must Read: As of May 2022, Pakistan’s current account deficit totals $1.43bn

The National Assembly also gave a approval to a 1-4 percent super tax on the salaries of people with high incomes, which the government enacted this week.

The leaders introduced a 1% tax for people earning between Rs150 and Rs250 million per year and 2% tax on people earning more than more than Rs200 million annually as well as 3% tax for individuals earning over 250 million dollars per year, and 4percent tax on those earning more than $300 million.

A modification was also ratified that imposed a tax between Rs100 and Rs16,000 on the import of mobile phones, based on their value.

This amended Finance Bill, 2022, incorporates additional amendments that were made late on Tuesday night, including an additional rise in the rate of Federal Excise Duty (FED) on cigarettes, a potential reduction in the tax rate for sales between 17% and percent for the importation from pharmaceutical raw material tax exemption for cinemas and production houses and a change in what is considered to be “deemed rent income” by replacing “immovable assets” in the definition of “capital assets” along with other procedural and legal changes included in the Finance Bill, 2022.

The FBR has also cut the tax on value of capital (CVT) on automobiles between 2% and per cent in an amended Finance Bill 2022.

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