The National Assembly approved major tax breaks for certain individuals and influential groups in society. Government has done 10 amendments to Finance Bill.
On the recommendations of Pakistan Tehreek-e-Insaf (PTI), the lower house of parliament yesterday (Monday) approved the Finance Act 2020, which included some important amendments after the budget was presented on June 12, which the ruling party decided to incorporate into the law.
Before the budget’s approval, the government also withdrew a proposal to impose a new tax on luxury homes and farms in the Islamabad Capital Territory. Tax Exemptions that were not included in the Finance Bill 2020 and were added later.
These include reducing the income tax rate on the income of engineering services, shipping business, real estate investment trusts, some educational institutions, and tax rates for electric vehicles and Hajj operators. The government also withdrew an amendment to section 73, which would have banned the sale of goods worth more than Rs 100 million to unregistered persons within a year.
The ban is currently limited to manufacturers and producers, which the FBR proposed extending to individuals. The government’s move would be a blow to the government’s efforts to document the informal economy. Similarly, the rate of capital gains tax for unlisted companies on the stock exchange has also been reduced.
The IMF had opposed tax breaks for shipping business and real estate investment trusts. Similarly, the IMF is also opposed to giving specific tax exemption to individuals or institutions but the National Assembly has exempted Foundation University from income tax.