Govt determined to set economy on positive trajectory: Ishaq Dar.
Govt asked to collect 1% tax from non-filers on rental income on land. The Reforms and Resource Mobilisation Commission (RRMC) suggested the government collect a 1% tax on deemed rental income on land held by non-filers in the upcoming budget 2023-24, media reported.
The commission, constituted by the incumbent government has, so far, made some changes to existing tax laws to broaden the tax base but it is yet to make any major recommendations.
The interim report submitted by the commission said that the imposed tax on deemed rental income under Section 7E on land and property is only being collected from filers and not from non-filers.
The report has urged the government to frame such rules to make it clear that the non-filers pay 1% in urban and semi-urban areas and ensure that the tax is collected by instructing the land registration and transfer authorities to ensure its collection on the transfer of the land.
Its collection should be made just like the non-utilisation fee is collected by various authorities or it should be sought by attachment if the value of such unpaid 1% tax under 7E on land held by non-filers increases beyond Rs10 million.
The federal excise duty (FED) is applicable to international air travellers both filers and non-filers. To encourage filers and penalise non-filers, FED should be replaced with advance income tax, which should only be made applicable to non-filers.
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It is suggested that the FED on air travel outside Pakistan or paying for such travel, even in economy class, should be subject to the FED at 20%. Such FED may not be levied for Haj travel but for one Haj in the last five years.
To promote recycling and value addition of waste material, and to promote environment-friendly business structures, the purchase of waste/used material should be exempt from income tax and sales tax withholding as an initial step for at least five years.
According to an official announcement made after the meeting, Federal Minister for Finance and Revenue Ishaq Dar chaired the meeting of the RRMC at the Finance Division on Saturday. MoS/Chairman RRMC Ashfaq Yousuf Tola, Special Assistant to Prime Minister on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, secretary finance, Federal Bureau of Revenue (FBR) chairman, and other senior officers from Finance Division, FBR and RRMC attended the meeting.
Dar welcomed the members of the commission and highlighted the current economic and financial outlook of the country. He shared that in spite of challenges, the government is determined to set the economy on a positive trajectory by introducing reforms in various sectors to achieve economic stability and growth.
The commission chairman presented an interim report containing recommendations to the finance minister. The minister appreciated the efforts of the RRMC in recognising issues and challenges in the existing taxation system and for devising valuable suggestions for reforms in the revenue policies for resource mobilisation, ease of doing business and taxpayer facilitation to achieve sustainable economic growth.
The meeting deliberated upon the suggestions being put forward by the commission and agreed to come up with business-friendly tax reforms after interacting with all the stakeholders.
The minister extended his best wishes and absolute support to the commission to ensure fast-track implementation of the reforms.
The commission chairman expressed his gratitude to the minister for taking a keen interest in the process and for his kind support for comprehensive reforms.
