Source (Ministry of Finance
www.finance.gov.pk)
Salient features of the Budget 2005-06
INCOME TAX
Personal tax rates for salaried persons proposed to be reduced to range between 3.5% to 30%.
Annual statement filed by the employer proposed to be considered as sufficient discharge of liability to file a return on the part of the employee.
Enhancement of exemption limit from Rs. 300,000 to 400,000 proposed for senior citizens.
Tax rebate proposed to be increased from 50% to 75% in the case of teachers and researchers.
Increase in limit from Rs. 100.000 to Rs. 150,000 proposed for investment in TFCs and new shares.
Exemption for employees proposed in respect of perqs carrying zero marginal cost to the employers.
Relaxation proposed in conditions for mandatory filing of return.
Straight deduction proposed for donations made to specified institutions.
Removal of limit proposed on value of motor vehicle for the purpose of claiming depreciation.
Depreciation Schedule proposed to be rationalized.
Provision of deductibility of bad debts proposed to be liberalized.
Reduced rate of 20% proposed for small companies – exemption from turnover tax – no obligation to act as withholding gent.
Reduction of 1% in tax proposed for new enlistment on stock exchanges.
Concept of group relief proposed to be extended to services sector.
Two way set-off losses proposed on amalgamation – amalgamation proposed to be opened up for industrial undertakings.
One time exemption proposed on corporatization of individual stock exchange membership.
Exemption proposed for insurance companies in respect of capital gains derived from sale of shares.
Rationalization of withholding tax on sale of hides and skins proposed.
Income from services rendered abroad proposed to be taxed @ 1%.
Withholding tax on ships imported for dismantling proposed to be reduced from 3% to 1%.
Withholding tax rate proposed to be reduced to 1% on imports of certain types of fabrics.
Withholding tax on telephone subscription proposed to be rationalized.
One time waiver from payment of additional tax proposed for telecom companies.
Exemption from income tax proposed for corporatized entities of WAPDA.
Exemption for Hubco in respect of profit and debts on accounts with financial institutions, proposed to be restored.
Exemption from income tax proposed for M/s Fugro Geodetic Limited from survey of continental shelf.
Exclusion of large corporate trading houses from presumptive tax regime.
Enhancement in tax rates proposed for certain exports.
Tax @ 0.1% on cash withdrawal from banks proposed.
Withholding tax of 6% proposed on purchase of new cars.
1% final tax proposed on retailers of textile goods with turnover of more than of Rs. 5 million.
A uniform rate of 6% of withholding tax proposed on all types of contracts.
Option to be assessed under PTR proposed to be withdrawn in the case of manufacturers cum suppliers.
Enabling provision proposed to be introduced for electronic filing of return.
Direct reference to High Court proposed.
Commissioner (Appeals) proposed to be divested of the power to setaside an assessment.
Definition of public company modified to include companies with foreign government holdings of minimum 50%.
Provisions for Alternate Dispute Resolution proposed to be rationalized.
Measures for implementation of Voluntary Pension System Rule proposed to be introduced.
CAPITAL VALUE TAX
Exemption proposed to be allowed to Kot Addu Power Station on assets purchased in 1996 prior to privatization.
WEALTH TAX
Alternate Dispute Resolution proposed to be introduced for wealth tax cases.