1. The finance bill of 2007 made several important changes to taxation laws in Pakistan. It introduced a tax credit for investment in new shares, imposed restrictions on exemption certificates, and revised tax rates for various sectors like retailors, CNG stations, and exports.
2. Specific changes included a tax credit for individuals investing in shares, new rules for retailors to file tax returns and pay taxes, and requiring wealth statements even for those with declared income below Rs. 1 million.
3. Tax rates were also adjusted for various sectors, such as withholding tax on imports, services, and electricity bills. Advance tax rules and adjustments were modified for companies.
1. The finance bill of 2007 made several important changes to taxation laws in Pakistan. It introduced a tax credit for investment in new shares, imposed restrictions on exemption certificates, and revised tax rates for various sectors like retailors, CNG stations, and exports.
2. Specific changes included a tax credit for individuals investing in shares, new rules for retailors to file tax returns and pay taxes, and requiring wealth statements even for those with declared income below Rs. 1 million.
3. Tax rates were also adjusted for various sectors, such as withholding tax on imports, services, and electricity bills. Advance tax rules and adjustments were modified for companies.
1. The finance bill of 2007 made several important changes to taxation laws in Pakistan. It introduced a tax credit for investment in new shares, imposed restrictions on exemption certificates, and revised tax rates for various sectors like retailors, CNG stations, and exports.
2. Specific changes included a tax credit for individuals investing in shares, new rules for retailors to file tax returns and pay taxes, and requiring wealth statements even for those with declared income below Rs. 1 million.
3. Tax rates were also adjusted for various sectors, such as withholding tax on imports, services, and electricity bills. Advance tax rules and adjustments were modified for companies.
SOME OF IMPORTANT CHANGES MADE VIDE FINANCE BILL 2007
TAX CREDIT FOR INVESTMENT IN NEW SHARE. (SECTION 62):
A person, other than a company is now entitled to tax credit for investment in shares, as a original allottee as per following limit:- a) 10% of the Persons taxable income !" b) Rs. 300,000/- whichever is less. TAX ON RETAILORS (SECTION 113A) : A "etailer with #$"%!&'" below "s (0, 00,000)- can file t*rnover ret*rn by paying 0(0% #ax on his declared t*rnover +*ch "etailer is however can not claim ad,*stment of any with-holding tax collected or ded*cted TAX ON RETAILOR!S S"B#ECT TO SALES TAX (SECTION 113B) : A "etailer who is s*b,ect to +ales tax with t*rnover exceeding ( million can pay single stage combined sales tax and income tax as per following tax rates:- i #*rnover between ( million to 10 million "s -(000 pl*s 0(% of t*rnover exceeding ( million ii 'xceeding 10 million "s (0,000 pl*s 0.(% of t*rnover exceeding 10 million #he "etailer shall not be entitled to claim any ad,*stment of withholding #ax collected or ded*cted FILLING OF WEALTH STATEMENT (SECTION 116) 1 #he /ommissioner is empowered to iss*e notice for filling of wealth statement even if the declared income is below "s ( lacs - 0t is mandatory to file the wealth statement where the declared income is "s ( lacs or more /ont1d on 22P)- Auditors, Advocates, Taxation & Company Law Advisors 305, Frere Business Centre, Frere Road, Near KMC Akhbar Market, Karachi-74200 e!" 272#357 $ 272#35% 2772%44 $ 2772%45 2750547 Fa&" 2775000 $ S%&&' ( 2) ADVANCE TAX "*S 1+7 1 3hile calc*lating advance tax liability the minim*m tax *)s 114 shall also be ta5en into consideration - 0n case of first year of a company the advance tax liability shall be paid on the basis of estimate of 1 st 6*arterly income)t*rnover #he advance tax shall be paid ma5ing ad,*stment of tax already paid ) ded*cted or collected EXEMPTION CERTIFICATE. (SECTION 1+,(3)) #he power of commissioner to iss*e exemption certificate *)s 178 has now been restricted #he following person is now eligible to apply for exemption certificate:- a A Person 9other than covered by P#") whose income is ':';P# or d*e to bro*ght forward losses< he is not li5ely to pay any tax WITHHOLDING TAX ON P"RCHASE OF GOODS - SERVICES (SECTION 1.3). 1) Pres*mptive withholding tax introd*ced last year for services providers to ':P!"#'"+ is now withdrawn -) A cotton ginner has now option to pay by himself the tax e6*al to the amo*nt of tax ded*ctible on the payment and prod*ce the evidence to this effect to the withholding agent 4) #he tax ded*cted *)s 1(4 shall be ad,*stable for the following persons:- a) A company whose tax has been ded*cted for rendering or providing of services b) Advertisement services by owners of news papers and maga=ines c) +ales of goods and exec*tion of contracts by p*blic company listed on a registered stoc5 exchange d) /%0/ is to be *sed for identification p*rpose, as an alternate, where %#% is not obtained TAX ON P"RCHASE OF MOTOR CAR (SECTION 231B) . (% advance ad,*stable tax is to be paid on val*e of car p*rchased from man*fact*rer or a*thori=ed dealer PRES"PTIVE TAX ON CNG STATION (SECTION 23+A) . 1) Advance tax > ?% of @as /ons*mption /harges shall be collected by @as /ompany on gas bills -) #he tax so collected shall be final tax on the income of /%@ +tation /ont1d on 22P)4 $ S%&&' ( 3) TAX COLLECTED ON ELECTRICIT/ (SECTION 23.) :
#he tax collected on electricity bill from a person 9other than a company) shall be ;0%0;$; #A: on his income and no "'A$%B of tax so collected shall be allowed CAPITAL GAIN ON DEALING OF SHARE. #he exemption period is extended *p to 40 th C*ne -008 TAX ON IMPORTS. 1) #he rate of withholding tax on commercial imports is red*ced to (% -) #he withholding tax on import of polyester filament yarn is (% TAX ON EXPORTS (SECTION 1.+) . #he 3ithholding #ax on 'xports has been revised as *nder:- %A#$"' !A @!!B+ #A: D'A" -00. #A: D'A" -008 1) 'ngineering goods E other goods Fisted in Part 0 +eventh +ched*le 0.(% 1% -) Feather E #extile made *ps E other goods Fisted in 100% 1% Part 00 of seventh sched*le 4) Feather ) #extile article, /arpet, s*rgical goods 1-(% 1% E other goods listed in Part 000 of seventh sched*le 7) "aw /otton E /otton Darn 1(% 1% WITHHOLDING "*S 1+, FROM MAN"FACT"RER CLA"SE 13 PT II SECOND SCHED"LE. Ad,*stable 3G# *)s 178 from man*fact*re on import of: a) /apital @oods meant for local *se 1% b) "aw materials for self cons*mption if finished prod*cts are sold locally is 1% c) Gowever import of polyester filament yarn will be s*b,ect to payment of tax > (% d) %o 3G# on import of capital goods and raw materials by man*fact*rer, 'xporter meant for 'xport