The government has reduced sales tax on the import of active pharmaceutical ingredients (APIs) to one per cent from the existing 17 per cent, with some other minor amendments to income tax rates in the Finance Bill 2022-23. Sales tax on APIs reduced to 1pc.
The amendments were introduced in the National Assembly by Finance Minister Miftah Ismail and State Minister Ayesha Ghaus Pasha, and were approved by the parliament along with the original draft of the finance bill.
The information technology venture capital companies have been exempted from income tax, while cinemas have been granted a five-year break from paying any income tax across the country. Families of shaheed of armed forces and the federal government have also been exempted from deemed rental income.
A new section has been introduced which empowers the Federal Board of Revenue (FBR) to introduce fixed tax regimes up to Rs200,000 for retailers and services providers in the future. The FBR will now notify the fixed tax schemes through a notification from time to time through a statutory regulatory order.
The government has announced that three additional charitable organizations – Burhani Qazran Hasana Trust, Saifee Hospital Karachi and Saifiyah Girls Taalim Trust – will be exempt from tax. They have also extended the alternate dispute resolution to sales and federal excise duty.
Finally, they have stated that no tax will be charged on the imports of smartphones in CKD/SKD conditions if imported by local assemblers/manufacturers duly certified by Pakistan Telecommunication Authority (PTA) subject to its quota.
In the sales tax, fat-filled milk was also included in the list of the zero-rated regime. Moreover, local supplies of raw materials, components, parts and plant and machinery to registered exporters authorised under the Export Facilitation Scheme 2021 were also included in the domain of zero-rated regime. The sales tax exempted on local supply of nans and chapatis from all shops.
The sales tax on the local supply of manufactured articles of jewellery or precious metal is fixed at 3pc. However, there will be no input tax adjustment.
The rate of tax will be 12.5pc on electric vehicles in CBU conditions of 50 kWh battery or below and 1pc on EV transport buses of 25 seats or more in CBU conditions.