Revenue Measures by Federal Board of Revenue - Press Release issued by Federal Board of Revenue (FBR)

Islamabad, March 15, 2011 (PPI): Following is the text of press release issued by Federal Board of Revenue (FBR)

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Federal Government has taken various revenue measures today to achieve collection target of Rs. 1604.0 billion during 2010-11.

02. President of Pakistan has promulgated three Ordinances today on the advice of the Prime Minister whereby amendments have been made in the Sales Tax Act, 1990, Income Tax Ordinance, 2001 and Federal Excise Act, 2005. The following tax measures have been taken through these amendments:

1. Sales tax at the rate of 17% has been imposed on tractors;

2. A one-time surcharge of 15% has been imposed on income tax payable during tax year 2011; and

3. Special excise duty rate has been increased from 1% to 2.5% for the remaining period of tax year 2010-11.

03. Federal Government has also withdrawn exemption of sales tax from fertilizers, pesticides and input tax on agricultural tractors by rescinding its Notifications SRO No. 535(I)/2008, dated 11.06.2008, SRO No. 536(I)/2008, dated 11.06.2008 and SRO No. 706(I)/2010, dated 02.08.2010 through Notification SRO No. 229(I)/2011, dated 15.03.2011. The facility of zero-rating on plant, machinery and equipment including parts thereof has also been withdrawn by amending SRO 549(I)/2008, dated 11.06.2008 through Notification SRO No. 230(I)/2011, dated 15.03.2011. These goods will now be liable for sales tax at the rate of 17%

04. Moreover, zero-rating on five major export oriented sectors (textiles, carpets, leather, sporting goods and surgical goods) has been restricted to registered manufacturers-cum-exporters and exporters for export purpose only by an amendment in SRO 509(I)/2007, dated 09.06.2007 through Notification SRO 231(I)/2011, dated 15.03.2011. Domestic supplies of these sectors will now be liable to sales tax at the rate of 17%.

05. FBR has rescinded its Notification SRO 564(I)/2006, dated 05.06.2006 where under sales tax was being charged on sugar at the assessable value of Rs. 28.88 per kg. Now sales tax @ 8% will be charged on the actual price of sugar.

06. All the above measures are likely to generate additional revenue of Rs. 53 billion during remaining period of 2010-11.