Changing in Taxation 2017, Pakistan

1 Exemption on cash withdrawal by branchless banking agents:

The first change in taxation is exemption on withdrawal cash by branchless banking agents.
Present tax at 0.3 percent and 0.6 percent is deducted upon aggregate cash withdrawals
exceeding Rs 50000 per day from filers or non filers. There is change in taxation is that
exemption of withdrawal cash by branchless banking agents.

2 Reduction in threshold for paying advance in the case of individual:

Another change in taxation is reduction in threshold for paying advance tax. At present an
individual is responsible to pay tax if taxable is Rs 500000 or more. In order to provide relief, the
threshold for payment of advanced tax on the basis of latest taxable income is being increase
from Rs 500000 to Rs 1000000 that is another change.

3 Relief for individual or AOP,s paying health insurance premium:

Another change in taxation on relief for individual or AOP,s. In order to provide relief for
individual or AOP,s paying health insurance premium, credit is provide to such persons on the
basis is being increased from Rs 100000 to Rs 150000.

4 Extending period for which tax credit on enlistment is available:

Another change in taxation is extending period for which tax credit on enlistment is
available. At present, enlistment of a company in the stock exchange, 20% tax credit for a period
of two tax years is available on the tax payable by company. In order to further incentivize the
enlistment of companies on the stock exchange such tax credit is being extended for another two
tax years, however, such tax credit shall be allowed at10% of the tax payable for each of two tax
years.

5 Exemption for non- profit institutions:

In order to encourage the non- profit organizations, income of following organizations is
proposed to be exempted.

1 Gulab Devi Chest Hospital

2 Pakistan Poverty Alleviation Fund

3 National Academy of Performing Arts

6 Reduction of withholding tax rates on fats moving consumer goods:

 Another change in taxation is reduction on withholding tax rates. At present the rates of
withholding tax on Fast Moving Consumer Goods is 3% and 3.5% . In order to mitigate their
hardship, the rates of withholding tax are being reduced to 2% and 2.5% respectively for
companies that is another change.

7 Withdrawal of tax credit to manufacturers making 90% sale to registered

persons:
A tax credit of 3% of tax responsibility was made available to all manufacturers who make
90% of their sales to sales tax registered persons in order to encourage documentation. This
incentive has failed to achieve its objective. In this backdrop this tax credit is being withdrawn.
This is another change.

8 Rationalization of withholding tax on sale to retailers in respect of

electronics goods:
Another change is in rationalization of withholding tax on sale to retailers in respect of
electronic goods At present rate of withholding tax on sales of electronics goods to retailers is
liable to pay withholding tax at the rate of 0.5%. It is proposed to increase the tax rate to 1%.

9 Reduction of duty on aluminium waste or scrap:

Another change in taxation is Reduction of duty on aluminium waste or scrap. There is reduction of
duty from 10% to 5%.

10 Reduction of duty on sheets for veneering rom:

Another change is reduction of duty on sheet for veneering rom. There is Reduction of duty on
sheets for veneering rom 16% to 11%.

11 Increase of duty on aluminium beverage cans:

There is change is increase of duty on aluminium beverage cans. Increase of duty on
aluminium beverage cans from 11% to 20%

12 Exports Promotion:
Another change is that would be announcing additional measures to incentivize exports and
taking other initiatives to ease the cost of doing business and improving the overall regulatory
regime to facilitate exporters.

13 Reduction of cost of credit:

 The Government through SBP has developed a framework to reduce mark-up rates by 2.0% that
is another change in taxation.

14 Exemption of Sales Tax on Pesticides:

Another change in taxation is Exemption of Sales Tax on Pesticides. Pesticides are chargeable to
sales tax at reduced rate of 7%. This 7% sales tax rate is proposed to be exempted that is another
change.

15 Enhancement in the target of agriculture credit:

Another chnage in taxation is increase in the target of agriculture credit. Availability of credit
facilities to farmers especially the small farmers is Rs.600 billion in 2016. For 2017 agriculture
credit target is being increased to Rs.700 billion.