HIGHLIGHTS

• 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• Withholding tax @ 10% on income from Bahbood Saving Certificates/Accounts withdrawn.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• Mandatory payment of 15% of disputed tax for filing first appeal withdrawn.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• Withholding tax on import of machinery withdrawn.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.