While Pakistani government will introduce no new tax in the next budget, electricity prices will increase by at least 6 per cent, it was learnt on Friday.
The government also intends to increase the rate of withholding tax on the purchase of luxury vehicles in the next budget for 2012-13. The tax is already applicable on the purchase of new vehicles, depending on the engine capacity of the vehicle, but purchasers of luxury cars are not properly paying the withholding tax.
“We are making an attempt to ensure that the buyers of big vehicles pay the due amount of withholding tax. One of the proposals is to collect the tax at the time of booking of the car to ensure collection of withholding tax. This higher rate of tax will be adjustable at the time of filing of the income tax return by the purchaser of the vehicle.”
Mumtaz Haider Rizvi, FBR chairman, said this while briefing the NA Committee on Finance and Revenue here on Friday on the performance of the FBR in terms of revenue collection/mobilisation.
He claimed that the FBR would collect Rs2 trillion ($22.22 billion) in revenues against a target of $21.68 billion set for the fiscal 2011-12. He said no new tax will be imposed in the budget for 2012-13, which will be growth-oriented with an emphasis on documentation, simplification of tax systems, cleansing of the statutory regulatory orders (SROs) and phasing out of federal excise duties.
Highlighting the performance of the FBR in revenue collection and mobilisation, the newly appointed chairman informed the committee that the budget would focus on government policy of moving towards only three taxes i.e. income tax, sales tax and customs duty.
In this regard, Rizvi said, FED would be phased out gradually and FBR will take steps to move towards documentation of the economy and broadening the tax base. The growth-oriented budget will give priority to employment, industrialisation and investment and the objective of the simplification of taxes would be achieved through transparent, consistent and predictable systems.