INCOME TAX ORDINANCE, 2001

• Application of reduced rate to senior citizens raised to income threshold of Rs.300,000 from Rs.200,000.
• Withholding tax @ 10% on income from Bahbood Saving Certificates/Accounts withdrawn.
• Basic threshold of income raised from Rs. 80,000 to Rs.100, 000.
• Mandatory payment of 15% of disputed tax for filing first appeal withdrawn.
• Advance tax payment to be made on last assessed tax basis and provisions made for filling estimation of income for the current year.
• Withholding tax on import of DAP Phosphate reduced from 6% to 1%.
• Withholding tax on import of agricultural tractor in CBU condition reduced from 6% to 2%.
• Withholding tax on import of machinery withdrawn.
• Income from “capital gains” extended upto June 2007.
• Mark-up and debt written off under State Bank of Pakistan BPD Circular 29 of 2002 exempted from operation of certain tax provisions.
• Carry forward of unadjusted minimum tax on turnover allowed for adjustment against future tax liability upto five years.
• Tax credit to profit on interest on loan extended to house loan to employees of statutory bodies and public listed companies, from employers proposed.
• Tax withheld at import of edible oil to be treated as final tax. 1% tax to be paid on local purchases of edible oil.
• Exemption to income from vocational, technical or poly-technical institutions setup between 1st day of July 2004 or 30th day of June 2008 for a period of 5 years.
• Amalgamation facility to banking and non-banking financial institutions and insurance companies allowed.
• Holding companies allowed to claim loss, for three years, of their subsidiary companies.
• Creation of reserve allowed out of 3% consumer loan profits on NBFCs and HBFC.
• Retailers having annual turnover upto Rs.5 million may opt for payment of 0.75% of their declared turnover as final tax.
• Alternate Dispute Resolution Mechanism introduced.
• Mandatory filing of wealth statement by individuals declaring income of Rs.500, 000 and above.
• One page, simple return form for individual and AOPs introduced.
• Withholding tax on commission income of petroleum dealers at the rate of 10% to be treated as final tax.
• Withholding tax on commission of traveling agents and insurance agents at the rate of 10% to be treated as final tax.
• Withholding tax on income from lotteries, winnings and prizes other than prize bonds to be raised to 20% from 10%.
• 5% withholding tax on advertisement payments made to TV satellite channels operating from abroad levied.
  

CENTRAL EXCISE DUTY ACT, 1944

• Central Excise Duty on paints & varnishes withdrawn.
• Central Excise Duty on syrups, squashes & juices withdrawn.
• Price & duty adjustment on cigarettes and un-manufactured tobacco made.
• ‘Goods’ for levy of central excise duty to be in VAT mode.
• Central Excise Duty in VAT mode on edible oil/vegetable ghee/cooking oil levied.
• Central Excise Duty in VAT mode on advertisement on cable TV, CCTV and shipping agents levied.
• Alternate Dispute Resolution Mechanism Introduced.

CAPITAL VALUE TAX

• CVT at the rate of 0.1% of the purchase value of shares traded in stock exchange levied.
• Adjustment of CVT against any wealth tax liability withdrawn.

SALES TAX ACT

• Registered person allowed zero-rating on imports and supply of Plant, Machinery, Equipment and ginned cotton.
• Exemption on imports of tractors, bulldozers, combined harvesters and agricultural implements.
• Fixation of deemed price of DAP Fertilizer and Phosphoric Acid.
• Further Tax and higher rate of sales tax of 20% abolished.
• Registered Retailers and steel melters to come under simplified Tax Regime
• Carry Forward period reduced to six months.
• Activation Charge In Respect Of Cellular Phones reduced.
• Benefit of input tax on certain items with certain exclusions allowed.
• Certain types of Islamic banking and financing transactions excluded from the purview of sales tax.
• Turnover tax scheme abolished and exemption threshold raised at Rs. 5 million for both manufacturers and retailers.
• Sales tax on supply of Cottonseed, Crude Vegetable Oil obtained there from and Oil Dirt/Sludge. Supply of oil cake will be levied at zero-rated.
• Central Excise Duty in the VAT Mode on Advertisement on cable and closed circuit television and Services supplied by shipping agents allowed.
• Central Excise Duty in VAT Mode on Import/ Supply of edible oil and supply of vegetable ghee/cooking oil allowed.
• Presumptive Assessment Scheme improved.
• Import/supply of hides and skin and raw wool to be Zero-rated.
• New simplified Refund Rules introduced.
• Section 73 substituted and input on accrual basis allowed.
• Provisions relating to registration/deregistration simplified.
• Collectors given powers of condonation of delay.
• Penalty reduced.
• New sales tax registration and returns forms introduced.
• Debit and Credit Note Rules rationalized.
• Input adjustment on account of fake invoices to be disallowed.
• Penalty for cases of tax fraud increased.
• Collector empowered for requisitioning information from Banking Companies in cases of tax fraud.
• Restriction on supply of Filter Rods to unregistered persons.
• Provision made for search under Warrant.
• Provisions made to provide for assistance to officers of sales tax by other agencies.
• Board empowered to allow exemption on imports through special order.
• Rules issued in respect of services sector.
• Existing and new Notifications consolidated.
• Legal framework made for the Gawadar Special Economic Zone.
• Supply of zero-rated goods to privileged persons rationalized
• Payment in installments allowed.
• Taxable supplies without getting sales tax registration to be deemed as tax fraud.
  

CUSTOM ACT, 1969

• Customs duty on import of plant, machinery and equipment not manufactured locally reduced to 5%.
• Customs duty on import of industrial raw materials rationalized.
• Requirement for filling of indemnity bonds & installation certificates withdrawn.
• Duty rationalized on smuggling-prone items.
• Incentive package for agricultural sector introduced.
• Duty structure of auto sector rationalized.
• Clauses relating to surveys removed.
• Incentives given to the energy sector.
• Duty concessions on imports relating to disabled persons made.
• Concession for hospitals, educational institutions made.
• Customs Dispute Resolution mechanism in the Customs Act, 1969 introduced.
• The rate of penal surcharge of warehousing reduced from 2% to 1%.
• Incentives given to the specific sector like airline, film & cinema, energy, call centers industry.
• Duty concession given on the import of re-located projects/units.
• Fiscal incentives to the Oil Exploration and Production sector introduced.
• Scopes of concessions for local manufacture of machinery broaden.
• Incentive package for overseas Pakistanis – Baggage rules introduced.