Tag: levy

  • Govt slashes petrol price by Rs3.05, raises diesel by Rs8.95 per litre

    Govt slashes petrol price by Rs3.05, raises diesel by Rs8.95 per litre

    Due to changes in oil prices on the global market, the government announced a revision in petroleum prices on Sunday.

    According to a statement released by the Finance Division, the cost of petrol has been reduced by Rs3.05 a litre for the first half of August 2022.

    Petrol will now be sold for Rs227.19 per litre as a result of the pricing revisions. Previously, the price of petrolin the country per litre was Rs230.34.

    The price of high-speed diesel has been upped by Rs8.95, the new price per litre is now Rs244.95.

    The depreciation of the rupee against US dollar has raised the cost of purchasing petroleum products, the Ministry of Energy notified the Economic Coordination Committee (ECC) of the cabinet today.

  • Govt may cut petrol price by Rs11 per litre today

    Govt may cut petrol price by Rs11 per litre today

    The price of petrol may be reduced by Rs11 per litre by the government, according to sources privy to the matter.

    According to Dawn, the cost of petrol is anticipated to drop by Rs11 per litre, while the cost of high-speed diesel is anticipated to rise by Rs8 per litre. Petrol is currently available for Rs230 per litre.

    The tax on petrol is expected to surge by Rs5 per litre and the tax on diesel, kerosene, and light diesel by Rs10 per litre, as per reports.

    However, the Ministry of Finance will reveal a price revision today, and the new rates will take effect on August 1.

  • Petroleum prices may increase by Rs28.44 on Monday

    Petroleum prices may increase by Rs28.44 on Monday

    The Oil and Gas Regulatory Authority (OGRA) has calculated a price increase for petroleum products of up to Rs28.44 per litre that could go into effect on August 1.

    According to regulatory agency sources, the estimated ex-depot price of gasoline may increase by Rs6.53, high-speed diesel (HSD) by Rs28.44, kerosene oil (SKO) by Rs11.02, and light diesel oil (LDO) by Rs5.64 per litre based on the current rate of petroleum levy (PL).

    On Saturday (today), the Finance Division will move a summary calling for an increase in gasoline prices of up to approximately 11 per cent beginning August 1. The prime minister will, as usual, make the final choice in this matter.

    The cost of gasoline and HSD will also increase if the government decides to include the Rs7 per litre petroleum dealer’s per centage in the pricing structure. The Economic Coordination Committee (ECC) had earlier that day approved the petroleum dealers’ increased margin.

    The Petroleum Division had given the dealers assurances that the government would implement the margin as of August 1, 2022.

    According to these projected prices, the price of gasoline would increase from Rs230.24 to Rs236.77 per litre, the price of HSD from Rs236.00 to Rs264.44 per litre, the price of SKO from Rs196.45 to Rs207.47 per litre, and the price of LDO from Rs191.68 to Rs197.32 per litre.

    Presently, the PL on gasoline is Rs10 per litre, the PL on HSD, SKO, and LDO are each Rs5, and there is no sales tax.

    In order to reach the budgetary goal of Rs750 billion set in the Finance Bill 2022–23, the National Assembly has approved a rise in the maximum limit of PL from Rs30 per litre to Rs50 per litre.

    Read more: Petrol, diesel prices may increase by Rs10-17 per litre

    However, sources in the Petroleum Division believed that, at the current rate, the government was unlikely to collect Rs750 billion from PL in the current fiscal year, as that would only amount to a maximum of Rs14 billion per month.

    In addition, if the 17.5 per cent general sales tax (GST) is not imposed on these goods, a revenue shortfall of Rs45 billion per month is likely.

  • Imposing super tax on the rich will reduce budget deficit: Miftah

    Imposing super tax on the rich will reduce budget deficit: Miftah

    The government’s recently announced indirect tax (super tax) is intended to assist the country in increasing tax revenue and lowering the budget deficit, according to Finance Minister Miftah Ismail.

    He was relating to the large industries’ 10 per cent super tax or poverty alleviation tax.

    13 industries, including LNG terminals, sugar, cement, steel, textile, tobacco, fertiliser, banks, oil and gas, beverages, automobiles, and steel, will be subject to this one-time levy, according to Miftah. The government labelled these 13 industries for a special tax as they made significant profits last year.

    Companies in these sectors earning more than Rs300 million will be subject to a 10 per cent super tax, he added.

    According to the finance minister, this tax is a one-time levy that will only be in effect for fiscal year 2022–2023.

    He clarified on Twitter that the 4 per cent super tax will be imposed on all industries.

    “For the specified 13 sectors, another 6 per cent will be added for a total of 10 per cent,” he said. “So their tax rates will go from 29 per cent to 39 per cent. This is a one-time tax needed to curtail the previous four record budget deficits.”

    The imposition of a super tax on the wealthy, according to Finance Minister, will lessen the country’s reliance on foreign aid, lower the budget deficit, and bring the country closer to financial stability.

    Other businesses that make over Rs150 million will be subject to a 1 per cent super tax, and those that make over Rs200 million will be subject to a 2 per cent tax. On top of the current rates, it is worth noting that these taxes are additional.

    Businesses that earn more than Rs250 million in revenue will pay a 3 per cent super tax, and those that earn more than Rs300 million will pay a 4 per cent super tax.

    He continued, citing statistics, that there were 9 million retail and wholesale establishments in Pakistan, and that the government wanted to bring an additional 2.5–3.5 million into the tax system.

    “We are linking the income tax and sales tax of these shops with the electricity bill,” Miftah said. “Now, small shops will pay a fixed tax of Rs3,000 and large shops will pay Rs10,000.”

    Only 22 of Pakistan’s more than 30,000 gold trading companies, he claimed, were registered, and their average annual sales came to Rs4,000.

    Sales tax and a fixed income of Rs40,000 will now be paid by gold shops of 300 square feet or less.

    He said that the government would lower the sales tax on large stores from 17 per cent to just 3 per cent.

    The withholding tax on jewellery sales to gold shops by the general public has been reduced from 4 per cent to 1 per cent.

    According to Miftah, fixed tax structures similar to these will be introduced for real estate agents, car dealers, and builders. Since this tax only applies to income and not to spending, inflation will not rise.

    Additionally, the withholding tax for the IT sector has been eliminated. Sales and income taxes would not apply to IT companies with annual revenue of less than Rs80 million.

    Miftah emphasised that Pakistan needs the IMF programme to resume as the country’s foreign exchange reserves are at a critical point.

  • Here are the latest income tax rates and slabs for salaried class

    Here are the latest income tax rates and slabs for salaried class

    In the budget for fiscal year 2022-23, the government has exempted those earning up to Rs100,000 per month from paying income tax, up from Rs50,000 last year.

    For the salaried income group, the latest budget is a mishmash as the government reduced tax rates and the number of slabs while eliminating available credit through the omission of deductible allowance for profit on debt and tax credit for investment in shares, health insurance, and pension funds.

    Moreover, the government has released a revamped list of income tax brackets for salaried employees. There were previously 12 slabs, which have now been shrunk to seven.

    Here are the new slabs:

    1. For annual incomes less than Rs600,000 (below Rs50,000 per month)
    2. For a yearly income of Rs600,000-Rs1.2 million (Rs50,000 to Rs100,00 per month).
    3. For annual earnings of Rs1.2m-2.4m (Rs100,000 to Rs200,000 per month)
    4. For annual earnings of Rs2.4m-3.6m (Rs200,000 to Rs300,000 per month)
    5. For earnings of Rs3.6m-6m (Rs300,000 to Rs500,000 per month)
    6. For annual earnings of Rs6m-12m (Rs500,000 to Rs10,00,000 per month)

    For annual earnings of more than $12 million (more than $100,000 per month), income tax is not to be levied on people earning between 0 and Rs600,000 per year (where income from salary exceeds 75 per cent of taxable income). A nominal amount of Rs100 will be subtracted per year from those earning between Rs600,000 and Rs1.2 million.

    Employees getting paid more than Rs1.2 million but less than Rs2.4 million per year will be levied 7 per cent of the amount that exceeds Rs1,200,000 in the third slab.

    An employee getting paid Rs1,400,000 per year will be levied 7 per cent of Rs200,000 (Rs1,400,000 minus Rs1,200,000 since that is the amount exceeding Rs1,200,000).

    As per the latest budget resolution, the government recommended an income tax rate of 20 per cent on small business earnings, 42 per cent on banking, and 29 per cent on related companies.

  • Getting a new car? Check out the new advance tax imposed on your favourite vehicle

    Getting a new car? Check out the new advance tax imposed on your favourite vehicle

    The government has released the fiscal budget for 2022-23, which includes several changes, including a 200 per cent advance tax on the purchase of cars with engine displacements greater than 1600cc for non-filers.

    This decision is likely to possess a considerable effect on the sales of several cars in Pakistan, which have already witnessed multiple price hikes in previous months. The tax amount for non-filers has now been doubled, which will have an influence on new car sales, particularly those with larger engines.

    The advance tax will now be applicable to several famous vehicles that have dominated the auto industry for years now from well-known manufacturers, including old players like Honda and Toyota, as well as new players like Hyundai, Kia, DFSK and BAIC.

    Taxes for filer and non-filer

    Toyota Corolla Altis Grande, 1800cc, ranges from Rs4,499,000-4,859,000, Tax for filer: Rs150,000, Tax for non-filer: Rs300,000

    Hyundai Elantra GLS, 2000cc, priced at Rs4,949,000, Tax for filer: Rs200,000, Tax for non-filer: Rs400,000

    Hyundai Tucson, 2000cc, ranges from Rs5,799,000-6,299,000, Tax for filer: Rs200,000, Tax for non-filer: Rs400,000

    Hyundai Sonata 2.0, 2000cc, priced at Rs6,999,000, Tax for filer: Rs200,000, Tax for non-filer: Rs400,000

    DFSK Glory 1.8 CVT, 1800cc, priced at Rs5,159,000, Tax for filer: Rs150,000, Tax for non-filer: Rs300,000

    Kia Sportage, 2000cc, priced at Rs5,300,000-6,300,000, Tax for filer: Rs200,000, Tax for non-filer: Rs400,000

    BAIC BJ40, 2000cc, priced at Rs8,199,000, Tax for filer: Rs200,000, Tax for non-filer: Rs400,000

    Hyundai Sonata 2.5, 2500cc, priced at Rs7,849,000, Tax for filer: Rs300,000, Tax for non-filer: Rs600,000

    Kia Sorento, 2400cc, ranges from Rs6,836,000-7,499,000, Tax for filer: Rs300,000, Tax for non-filer: Rs600,000

    Toyota Fortuner, 2700-2800cc, ranges from Rs9,959,000-12,679,000, Tax for filer: Rs400,000, Tax for non-filer: Rs800,000

    Toyota Hilux, 2800cc, ranges from Rs7,359,000-9,729,000, Tax for filer: Rs400,000, Tax for non-filer: Rs800,000

    Isuzu D-Max V-Cross, 3000cc, ranges from Rs6,600,000-6,960,000, Tax for filer: Rs400,000, Tax for non-filer: Rs800,000

    Kia Sorento V6, 3500cc, ranges from Rs7,499,000, Tax for filer: Rs450,000, Tax for non-filer: Rs900,000

    Local vehicle assemblers are dissatisfied with the new budget, claiming that the government unilaterally raised advance tax on motor vehicles larger than 1,600cc because the industry did not propose it. They claim that the decision is also discriminatory and will reduce auto sales.

    Read more: Energy sector to get a massive portion of the Rs699 billion subsidy

    Advance tax on motor vehicles larger than 1600cc has been doubled, while electric vehicles costing Rs5 million or more will be subject to a 3 per cent tax.

  • Direct taxes target predicted at Rs2,560 billion for FY 22-23

    In an attempt to meet the Federal Board of Revenue’s (FBR) revenue collection target of Rs7,255 billion for the upcoming fiscal year, the direct taxes target has been predicted at Rs2,560 billion, up from Rs2,182 billion in 2021-22.

    According to Brecorder, the indirect taxes (net) estimates were predicted at Rs4,695 billion in the macroeconomic framework for 2022-23. Direct taxes forecasts included income tax and withholding taxes, whereas indirect taxes projections included sales tax, customs duty, and Federal Excise Duty (FED).

    The indirect tax goal for 2022-23 has been set at Rs4,695 billion, up from Rs3,647 billion in 2021-22, representing a Rs1,048 billion rise. The indirect tax revenue for the fiscal year 2021-22 was Rs3,440 billion.

    The entire collection of indirect taxes in 2020-21 was Rs3,008.2 billion. Direct taxes are expected to reach Rs2,560 billion in the next fiscal year, up from Rs2,182 billion in 2021-22, a Rs378 billion increase.

    Read more: PM Shehbaz directs to eliminate taxes on raw materials used by export industries

    During the first 11 months of the current fiscal, the FBR collected roughly Rs1.9 trillion in direct taxes. In the fiscal year 2020-21, direct tax collections totalled Rs1,726.0 billion. Withholding taxes account for 72 per cent of the total direct tax collection.

  • Additional tax to be levied on high-earning businesses

    Additional tax to be levied on high-earning businesses

    In the budget (2022-23), the government intends to impose a time-limited levy or additional income tax on the yearly income earned by the steel industry, pharmaceutical business, and other profit-generating segments, as well as increase the minimum tax from two to six percent on the import of edible oil

    According to reliable sources, the government has made the decision to increase the rate of least tax on the import of edible oil from two to six percent in the next fiscal budget to boost the occurrence of levy on this large profit-earning sector. The steel sector’s minimum tax rate will be raised in the new budget.

    It is worth noting that the fresh charge will only be levied on industries and sectors that make massive profits, and it would only be in place for a limited time.

    According to Brecorder, the steel sector’s profits have increased by 20-30 per cent, but they are not paying the requisite tax bills. As a consequence, an extra income tax or levy on the yearly earned income by the steel industry, pharmaceutical sector, and other sectors earning windfall profits has been proposed for 1-2 years.

    Added income taxor levy will be paid in conjunction with the filing of tax records. The levy would be time-limited and could be imposed for one or two years.

    The Federal Board of Revenue (FBR) levies a two per cent least tax on edible oil imports, which is decided to ascend to six per cent beginning with the next fiscal year. Earnings in the edible oil industry are very high, with massive profits, but tax payments are consistent or on the low side.

    The Federal Board of Revenue (FBR) is updating a list of high-profit industries based on tax financial records, annual financial statements, and third-party data.

    A new section in the Income Tax Ordinance 2001 would be introduced through the new Finance Bill 2022 for the imposition of the said levy on high profit earning sectors.

  • CNG prices pushed to Rs140 per kg for sales tax collection

    CNG prices pushed to Rs140 per kg for sales tax collection

    The Federal Board of Revenue (FBR) has raised the sales tax rate on compressed natural gas (CNG) supplies to customers.

    On Tuesday, the FBR published S.R.O. 587(I)/2022 to replace S.R.O. 39(I)/2022, which was issued on January 8, 2022. It has amended the value of compressed natural gas (CNG) supply to consumers in order to charge sales tax from CNG stations.

    It has set the value of supply to CNG customers in order for gas generation and distribution businesses to charge sales tax from CNG stations.

    CNG rates

    The price of CNG in Region-I, which includes Khyber Pakhtunkhwa, Balochistan, and Potohar, has been raised from Rs134.57 per kg to Rs140 per kg (Rawalpindi, Islamabad, and Gujar Khan).

    Read more: Pakistani Rupee crashes to a record low against US dollar 

    Moreover, the cost of CNG has been raised from Rs128.11 per kg to Rs135 per kg in Region-II, which covers Sindh and Punjab except for the Potohar region.