Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: form 3cd :: VAT Audit :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: due date for vat payment :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: VAT RATES
 
 
« Service Tax »
 India’s E-Service Tax Will Add To Foreign Content Providers’ Woes
 GST Council to discuss model laws, tax jurisdiction today
 Tax Invoice Under GST
 Insurance may fall under 12% tax slab in GST, from 14% service tax currently
 GST draft makes it must for companies to pass tax benefit to consumers
 To speed passage, Government plans GST Bills as money Bills
 No service tax on train tickets booked through IRCTC till December 31
 GST Council meet postponed to December
 Banks integrating systems with RBI, GST Network to collect tax: Arun Jaitleya
 Service tax waived for online train ticket booking till Dec 31
 Key challenges in implementation of Goods and Services Tax

Govt may increase tax on share-trading for non-filers
May, 30th 2016

The tax burden of non-filers of income tax returns is likely to go up by almost half on gains they make by trading shares at the Pakistan Stock Exchange (PSE), as the government is likely to introduce a new income tax regime for them in the new budget.

The government will also introduce a new sales tax regime for five export-oriented sectors, particularly the textile sector, to address a longstanding issue of industrialists. This regime will give industrialists about Rs20 billion in tax benefits next year alone and remove a permanent source of friction between them and the tax authorities.

Salaried persons could now come under the tax hammer

However, consumers will not gain anything from the new arrangement as they will still pay 5% sales tax on the purchase of garments and the rate may go up to 7% in the new budget.

Both proposals on a capital gains tax (CGT) and a new sales tax regime are part of the Money Bill 2016 that Prime Minister Nawaz Sharif will consider for approval during today’s (Monday) cabinet meeting.

Sources said Finance Minister Ishaq Dar has cleared a budget proposal to introduce separate CGT rates for non-filers of income tax returns who are making fortunes by trading securities at PSE.

For the first time, the government will also extend the concept of separate tax rates for filers and non-filers to the stock exchange. According to the proposal, the tax rate on shares sold by non-filers within a year may be set at 18%. In this category, the rate for filer may remain unchanged at 15%. The non-filer’s tax burden will be 20% more than the filers will pay.

Govt may double tax on transfer of properties

The rate of CGT on shares sold after one year but within two years could be fixed 16% for non-filers against 12.5% for filers – reflecting an increase of 28% for the non-filers.

The tax rate may be fixed at 11% for non-filers on the shares that they sell after two years but within four years of holding. The non-filer rate is 46.7% higher than what the government charges from the filers of the income tax returns in this category.

Three years ago, the government introduced the concept of filers and non-filers to encourage people to come in the tax net. The idea was that higher tax rates would compel people to file returns. However, the concept has become a source of earning for the government, as the government’s tax base has further shrunk by 18.4%. Against roughly 1.2 million filers last fiscal year, this year only 980,000 filed their returns.

Sources said Finance Minister Dar rejected a proposal to increase tax rates for the filers as well. He also turned down a proposal to increase the taxable withholding period of shares from four years to five years.

According to FBR officials, CGT collection from the stock market in the first nine months of the current fiscal year stood at just Rs4.2 billion. Taxes collected from the stock market do not match the strong performance of PSE, said experts. In the last fiscal year, total CGT collection from the stock exchange stood at only Rs7.1 billion. The effective CGT rate was just 5%, as Rs76 billion transactions were not taxed due to exemption under the holding period.

Dar on Sunday accepted industrialists’ demand of declaring the entire local and foreign supply chains of five export-oriented sectors to be charged at zero sales tax.

Insurance sector’s tax structure to change

Under the zero-rating regime, the manufactures pay the sales tax on purchases but the government subsequently returns the whole amount. These give sectors are textile, carpets surgical, sports and leather.

“The finance minister has announced plans to declare the whole textile supply chain zero-rated, which is in line with the promise made by Prime Minister Nawaz Sharif,” All Pakistan Textile Mills Association (APTMA) Chairman Tariq Saud said after meeting Dar.

The decision will reduce the cost of doing business and exports may increase by 25% in the next two years, said Zubair Motiwala, a business community leader. The decision will extend Rs20 billion in tax benefits to industrialists.

However, the government has managed to get something in return for it. The retail sales of fabric and garments have not been zero rated, which will be charged at the applicable rates. Secondly, the government will not refund the sales tax that it collects at the rate of 17% on packaging materials of all the five export-oriented sectors. This will give it extra revenue of Rs8 billion annually.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multi-level Marketing MLM India Affiliate Marketing Affiliate Marketing Software MLM Software MLM Solutions Multi level marketing solutions MLM Servi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions