Direct taxes budget for fiscal year 2014: major focus on steps to abolish FTR
March, 08th 2013
Direct taxes budget for 2013-14 would focus on measures to abolish the Final Tax Regime (FTR), rationalisation of Presumptive Tax Regime, marginal tax rates for sectors enjoying exemptions and options for taxability under the normal tax system of all sectors of the economy.
Sources told Business Recorder here on Thursday that the rationalisation tax procedures of foreign remittances; taxation of human resource providers; taxation of E-Trading and tax potential within commodity trading are also some of the other direct taxes policy guidelines for budget 2013-14.
The FBR has issued direct taxes policy guidelines for the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) for finalisation of direct taxes budget proposals for 2013-14. Based on these guidelines the direct taxes proposals would be finalised for the next budget. The taxation of non-residents, transfer pricing and royalty, etc, would remain on priority list.
According to the FBR, budget exercise 2013-14 has been initiated and the process of formulation of budget proposals has to be completed in the context of current tax/economic practices in vogue. The suggestions/proposals should be meant to remove irritants and to rejuvenate the economic growth viz-a-viz state revenues.
The FBR has identified following revenue potential areas for enhanced efforts to optimise realisation of taxes: broadening of tax base; measures for improvement in tax to GDP ratio; rationalisation/analysis of tax exemptions; Capital Gain Tax (CGT); enhancement of Minimum taxation regime; withholding taxes and its application for economic development in the country; rationalisation of Presumptive Tax Regime and abolishing of the concept of the Final Tax and option for taxability under the normal tax regime of all the sectors of economy.
The FBR has also identified policy measures including effective monitoring of the claims/issuance of refunds; taxation of the non-residents, transfer pricing and royalty etc; taxation of Human Resource providers companies; taxation of e-Trading; realisation of potential in the commodity trading; taxation of banking sector vis-à-vis lending borrowing ratio (being highest in the world); transport sector viability and potential; real estate development vis-à-vis contribution to the revenue; telecom sector vis-à-vis share in GDP and tax revenues; rationalisation tax procedures of foreign remittances; and marginal rate of tax regime for all those sectors which are enjoying exemptions to date.