Wait for finance bill passage delays tax relief

ISLAMABAD: The wait for the passing of a supplementary bill in the National Assembly has delayed its likely impact in tax relief to businesses and individuals.

The Finance Supplementary (Second Amendment) Bill 2019 was introduced in January with big claims by the government to give instant relief to taxpayers and businesses. However, the passage of the bill has been delayed owing to several reasons.

A senior official of the Federal Board of Revenue told Dawn that passing of the bill had been delayed due to preoccupation of the government machinery with the visit of Saudi Crown Prince Mohammad bin Salman.

The National Assembly session was prorogued on Jan 24. After 26 days, the session was convened on Wednesday, but no discussion was held on the finance bill though it was on the agenda of the session.

No discussion on bill held in National Assembly session, although it was on its agenda

The bill carries two kinds of relief measures — those that will come into effect with the passage of the bill and others that will come into effect from July 1.

The benefits that will reach the common people include abolition of withholding tax on cash withdrawal from banks and sale of banking instruments and allowing non-resident Pakistanis to purchase motor vehicles and immovable property without return filing requirements.

Other instant measures include allowing purchase of locally manufactured vehicles up to 1300cc without filing of return, lower tax rates for marriage halls, removal of advance tax on cash withdrawal from remittance-based accounts, abolition of withholding tax on members of stock exchanges and reduction in number of monthly withholding statements from 12 to two.

The sales tax measures announced in the supplementary budget will mostly come into effect from July 1. However, one measures payment of sales tax refunds through promissory notes.

Huge amounts claimed by taxpayers are stuck up in refunds and the delay in the passage of bill will lead to further delay in helping liquidity crunch for businesses.

On the customs side, according to the tax officer, most of the decisions including reduction in regulatory duties as well as enhancement have been notified through statutory regulatory orders. However, there are certain measures which will be effective from March 31.

Under the customs measures, the official said, certain measures would be implemented by the commerce ministry from July 1.