Beruflich Dokumente
Kultur Dokumente
2019 - 2020
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BUDGET PRECIS 2019-2020
Federal
Contents Preface Income Tax Sales Tax ICT
Excise Duty
Contents
PREFACE --------------------------------------------- 2
INCOME TAX ------------------------------------------- 3
SALES TAX ------------------------------------------- 25
FEDERAL EXCISE DUTY -------------------------------- 30
SALES TAX ON SERVICES-ISLAMABAD CAPITAL TERRITORY
----------------------------------------------------- 32
PREFACE
This document gives a brief insight of proposed amendments made through Finance Bill 2019. In
order to understand the impact of a particular proposed change, reference should be made to the
specific wordings in the relevant statues.
This document is accurate to the best of our knowledge and belief at the time of its provision for
issuance. It is intended to provide only a general outline of finance bill presented by the
Government of Pakistan for fiscal year 2020. Expert opinion on specific proposed change should be
sought before taking decision having major economic significance. PKF F.R.A.N.T.S., Chartered
Accountants and PKFI do not accept any responsibility for any loss arising from any action taken or
not taken by anyone using this publication.
INCOME TAX
Section 2(1A) has been proposed to define under Common Reporting Standard with
“active taxpayers’ list (ATL)”. The ATL is a list Pakistan.
instituted by the Board under section 181A f) “unspecified jurisdiction” means a
and also includes list issued by AJK or Gilgit- jurisdiction which is not specified
Baltistan Council Board of Revenue. The jurisdiction.
concept of Filer/non-filer earlier defined in
clause 23A and 35C have been proposed to be Super tax under section 4B was imposed on
omitted. big corporations for the rehabilitation of
temporarily displaced persons. Now, the
New clauses 5C, 38AB, 38AC, 38AD, 60A, and amendment has been proposed that while
73A have been proposed to define concepts computing income; brought forward
of “asset move”, “offshore asset”, “offshore depreciation and brought forward loss shall
enabler”, “offshore evader”, “specified not be considered.
jurisdiction” and “unspecified jurisdiction” in
order to tap new horizons of taxation. Tax on profit on debt under section 7B
chargeable to persons other than the
a) “asset move” means the transfer of an company is the final discharge of their tax
offshore asset to an unspecified liability. Now if the profit on debt in a year
jurisdiction by or on behalf of a person exceeds Rs 36 million; it would be taxed at a
who owns, possesses, controls, or is the normal rate and shall not be covered under
beneficial owner of such offshore asset this section. Amendment in section 151(3)
for the purpose of tax evasion. has been proposed where the tax deducted
b) “offshore asset” includes any movable or shall be minimum instead of final except in
immovable asset held, any gain, profit, or cases covered under section 7B.
income derived, or any expenditure A new clause (ca) proposed to be added to
incurred outside Pakistan.
section 21; whereby the commission paid or
c) “offshore enabler” means a person who payable in respect of supply of products listed
owns, possesses, controls, or is the in 3rd schedule of Sales Tax Act exceeds 0.2%
beneficial owner of such offshore asset of gross amount of supplies, such commission
and does not declare, or under declares shall not be allowed as admissible
or provides inaccurate particulars of such expenditure unless recipient of commission is
asset to the Commissioners. registered under sales tax Act and appearing
in ATL.
d) “offshore evader” includes any person
who enables, assists, or advises any Previously in case, the life of an intangible
person to plan, design, arrange or asset was not ascertainable; its maximum life
manage a transaction or declaration was considered as ten years and the cost was
relating to an offshore asset resulting in amortized over ten years. Now the useful life
tax evasion. of such asset shall be 25 years instead of ten
years for the purpose of amortization. Further
e) “specified jurisdiction” means any
section 24(11) has been proposed to amend
jurisdiction which has committed to
the cost of intangible shall not include self-
automatically exchange information
generated goodwill.
- TY 2021 0%
Tax Rates for Return on Investment in
Other Persons having income
of Rs. 500 Million or more Sukuks
Rs.1,710,000 +
Tax Rates for Imports under Section
And 35% of the gross 148
8,000,001
above amount exceeding
Rs.8,000,000 Non
Category ATL
ATL
Minimum Tax under section 113
- Industrial undertaking
1% of the 2% of the
Sr. importing remeltable steel
import import
N Persons Rate (PCT Heading 72.04) and
value as value as
o directly reduced iron for its
increased increased
- own use
a) Oil Marketing Companies, by by
1 0.75% customs- customs-
Oil Refineries, SSGCL, - Persons importing
Non Non
Category ATL Category ATL
ATL ATL
potassic fertilizers in duty, duty,
Ship breakers on import of
pursuance of Economic sales tax sales tax
ships 4.5% 9%
Coordination Committee of and and
the cabinet’s decision federal federal
Industrial undertakings not
No.ECC-155/12/2004 dated excise excise
covered above 5.5% 11%
the 9th December, 2004; duty duty
Companies not covered
- Persons importing urea
above 5.5% 11%
- Manufacturers covered
Persons not covered above 6% 12%
under Notification No.
S.R.O. 1125(I)/2011 dated
the 31st December, 2011 Rates of tax applicable under other
and importing items provisions of the Ordinance are tabulated as
covered under under with distinction of taxpayers being in
S.R.O.1125(I)/2011 dated ATL and not in ATL.
the 31st December, 2011;
Non-
- - Persons importing Gold Sec Category ATL
ATL
- Persons importing Cotton
Capital Gains Tax
- Persons importing LNG on Securities
2% ad 4% ad
Securities
Persons importing pulses valorem valorem
acquired before
basis basis 01.07.2016
where
Commercial importers
covered under Notification
No. S.R.O. 1125(I)/2011
3% ad 6% ad
dated the 31st December, Holding period 15% 30%
valorem valorem
2011 and importing items less than 12
basis basis
covered under S.R.O. 37A Months
1125(I)/2011 dated the 31st
December, 2011.
12.50
Holding period 25%
Persons importing coal 4% 8% %
12 to 24 Months
Persons importing finished
pharmaceutical products
that are not manufactured Holding period
otherwise in Pakistan, as 4% 8% more than 24
certified by the Drug 7.50% 15%
Months but
Regulatory Authority of purchased after
Pakistan 01-07-2013
Non- Non-
Sec Category ATL Sec Category ATL
ATL ATL
through
Satellite T.V.
Security Channels
purchased 0% 0%
before 01-07- Payments to
2013 Permanent
Establishment of
Securities Non- Residents
acquired after
01.07.2016 15% 30% supply of goods
irrespective of
holding period
- Company 4% 4%
Future
- Others 4.50% 4.5%
Commodity 5% 10%
Contracts-
supply of
services
Derivatives
traded on stock
5% 10% - Company 8% 16%
exchange settled
through cash
- Others 10% 20%
Profit on Debit 15% 30%
transport
151 2% 4%
Where profit ≤ services
10% 20%
Rs.500,000
execution of
Payments to contract
Non-Residents
for - Company 7% 14%
Non- Non-
Sec Category ATL Sec Category ATL
ATL ATL
Non- Non-
Sec Category ATL Sec Category ATL
ATL ATL
Non- Non-
Sec Category ATL Sec Category ATL
ATL ATL
Engine Capacity
1801 to 2000 25,000 50,000
(cc)
100,00 Purchase of
1801 to 2000 200,000
0 236B domestic air 5% 5%
ticket
150,00
2001 to 2500 300,000
0 Sale/transfer of
236C immovable 1% 2%
200,00 property
2501 to 3000 400,000
0
Functions and
250,00 236D 5% 5%
above 3000 500,000 gatherings
0
Non- Non-
Sec Category ATL Sec Category ATL
ATL ATL
SALES TAX
Paradigm shift in the definition of Cottage Tier-1 retailers are proposed to pay tax at
Industry is proposed. Now only normal rate under the Act. Customers of Tier-
manufacturing concern located in residential 1 retailers shall be entitled to receive cash
area which does not have industrial gas or back of upto 5% of the tax involved from such
electricity connection, having labour force date and in such manner as the Board may
upto ten workers and annual turnover from prescribe. This step would compel issuance of
all supplies not exceeding two million rupees sales tax invoice by the Tier-1 retailers on
would be considered as Cottage Industry customer’s demand.
which is not liable to registration under the
Act. Previously, manufacturing concern Value of supply in case of toll manufacturing
having annual turnover not exceeding ten is proposed to be defined as the actual
million and utility bills not exceeding eight consideration received for value addition
hundred thousand rupees were considered as carried out by the manufacturer.
cottage industry. Withholding tax regime has been proposed
to be made part of the main law and with
It is proposed to add importer in addition to enhanced ambit to cover transactions with
the manufacturer for the purpose of charging registered and active taxpayer companies.
sales tax on the retail price on the existing as The Board will prescribe the modalities in this
well as additional goods proposed to be regard.
included in the Third Schedule in this bill. Powers of Federal Government to zero rate
or exempt goods are proposed to be only
Certain Powers conferred to the Federal exercisable in the event of national security,
Government are proposed to be exercisable natural disaster, national food security and
by the Federal Board of Revenue with the for implementation of bilateral and
approval of the Minister-in-charge. In view of multilateral agreements.
this shift, appropriate amendments have
been introduced in sections 2(33), 2(43), Minimum value addition at import stage
3(3A), 7(3), 8(6), 37B and 67A of the Sales Tax currently regulated through Special
Act, 1990. Procedure is proposed to be made part of
Retailer whose shop measures one thousand main law with exclusion of POL products
square feet in area and above are proposed imported by licensed OMC and cellular and
to be covered in Tier-1 type and to pay sales satellite phones.
tax at normal rate. Tier-1 retailers dealing in
textile and leather products may charge 15% Input on supplies made to unregistered
sales tax in case of integration with FBR person where invoice do not bear NIC
system. number of buyers is proposed to be
disallowed on pro-rata basis.
The Commissioner Inland Revenue is
proposed to be empowered to exclude
registered person being a Tier-1 retailer or Restriction on claim of input for imported
scrap compressor is proposed to be
not a retailer from the ambit of chargeability
withdrawn.
of tax on electricity consumption.
Sales Tax invoice is proposed to be issued in Selection parameters for audit by the Board
Urdu or English. Further, in case of sale to the are proposed to be confidential in line with
unregistered person, NIC number of the provisions available in the Income Tax
recipient is proposed to be included in the Ordinance, 2001.
invoice. Textile sector dealing in yarn and
fabric is proposed to mention count, denier
and construction in the description of invoice. Schedules
The relaxation available for conduct of audit 3rd Schedule
once in three years under section 25 of the
Following items covered under the ambit of
Act is proposed to be conducted every year.
extra tax and sold in retail pack are proposed
to be brought back in Third Schedule.
Approval of Commissioner for revision of
return within sixty days of filing of original • Household electrical goods, including air
return is proposed to be done away where conditioners, refrigerators, deep
after revision, tax payable is enhanced or the freezers, televisions, recorders and
refund claimed is reduced. players, electric bulbs, tube-lights,
electric fans, electric irons, washing
Penalty for late filing of return is proposed to machines and telephone sets’
be doubled from the existing Rs.5,000 or • Household gas appliances, including cooking
Rs.100 per day i.e to Rs.10,000 and Rs.200 per range, ovens, geysers and gas heaters;
day respectively. • Foam or spring mattresses and other
foam products for household use;
A provision in the Act is proposed whereby • Paints, distempers, enamels, pigments,
criminal proceedings can be initiated against colours, varnishes, gums, resins, dyes,
any authority including any person employed glazes, thinners, blacks, cellulose
under such authority for willful and deliberate lacquers and polishes sold in retail
acts of omission and commission and packing;
resulting in undue advantage and personal • Lubricating oils, brake fluids,
benefits to the authority, person or the transmission fluid, and other vehicular
taxpayer or both. Respective headings 85 fluids sold in
retail packing;
Recovery from members or persons of • Storage batteries excluding those sold to
business enterprises is proposed to be automotive manufacturers or
rationalized by excluding those members assemblers;
12th Schedule
Minimum value addition on imported goods
for commercial importers made part of main
law. Conditions are similar to the existing
provisions.
However, minimum value addition on
mobiles/satellite phones and POL items
imported by licensed Oil Marketing Company
is proposed to be withdrawn.
2nd Schedule
FED on Steel billets, ingots, ship plates, bars and
other long re-rolled products is proposed to be
levied in Sales Tax Mode with input adjustment.
3rd Schedule
Exemption of FED on internet services is
proposed to be withdrawn.
4th Schedule
FED to be levied on steel products in the
following manner subject to certain conditions
and procedure specified in this Schedule.
SALES TAX ON
SERVICES-
ISLAMABAD
CAPITAL
TERRITORY
• Debt collection services and other debt
Tax rate on call center services is proposed to
recovery services
be reduced from 18.5% to 17%.
• Supply chain management or
Following Services are proposed to be added distribution (including delivery) services
in taxable ambit at standard rate of 16%. • Services provided or rendered by
• Advertisement on hoarding boards, pole persons engaged in intercity
signs and signboards, and websites or transportation or carriage of goods by
internet road or through pipeline or conduit
• Services provided by landscape • Ready mix concrete services
designers • Public relations services
• Sponsorship services • Training or coaching services other than
• Services provided or rendered for education services
purchase or sale or hire of immovable
Cleaning services including janitorial services,
property
collection of waste and processing of domestic
• Services provided or rendered by legal
waste
practitioners and consultants
• Services provided by accountants and
auditors
• Service provided or rendered by
Stockbrokers, future brokers and
commodity brokers, money exchanger,
surveyors, outdoor photographers,
event photographers, videographers,
art painters, auctioneers (excluding
value of goods) and registrar to an issue
• Services provided by race clubs: Entry/
admission and other services
• Services provided or rendered by
corporate law consultants
• Visa processing services, including
advisory or consultancy services for
migration or visa application filing
services
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