Home Technology Govt Introduces Amendments for Income Tax, Smuggling Penalties & More

Govt Introduces Amendments for Income Tax, Smuggling Penalties & More

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Govt Introduces Amendments for Income Tax, Smuggling Penalties & More
Govt Introduces Amendments for Income Tax, Smuggling Penalties & More

The government, through a presidential ordinance, has introduced Tax Laws (Second Amendment) Ordinance 2019 with major changes.

Briefing the media at Federal Board of Revenue’s (FBR) headquarters, FBR Member Inland Revenue (Policy) Dr. Hamid Ateeq Sarwar, Member Customs (Policy) Javed Ghani and Member IT Asim Ahmed stated that the Presidential Ordinance has been officially promulgated.

The ordinance will enable the sharing of information between the FBR and Financial Monitoring Unit (FMU) to facilitate the latter to perform its functions as laid down in the Anti-Money Laundering Act 2010 and to ensure compliance with the Financial Action Task Force’s regulations.

The amendments will apply to income tax, sales tax, and customs duty.

The changes include an increase in penalties on cash currency smuggling, a concession for the traders as promised, reduction in withholding and sales taxes of low-value mobile phone imports. Penalties have been considerably increased for smuggling foreign currency, precious stones, and jewelry under the ordinance.

If a person is caught smuggling foreign currency worth from USD 10,000- 200,000 and above, a fine of up to ten times the value and imprisonment of up to 14 years depending on the amount of currency seized under different categories/slabs will apply.

Under the ordinance, the FBR has divided currency carriers into different categories. Under the law, foreign currency up to $10,000 is allowed per person at the time of departure from Pakistan, the ordinance proposes to confiscate foreign currency from $10,001 to $20,000. In the case of foreign currency from $20,001 to $50,000, it seeks to impose penalties and imprisonment for up to 2 years. In the case of the foreign currency from $50,001 to $100,000, the penalty imposed could be 4 times the confiscated amount and imprisonment will be up to 7 years.

If the amount of currency seized is over and above $200,000, the penalty will be ten times the value of currency and imprisonment will be up to 14 years.

The government has introduced several amendments to the Income Tax Ordinance for encouraging investment in the local debt market and simplifying the tax regime for non-resident companies.

Standard Rate of Minimum Tax

The standard rate of minimum tax is being reduced from 1.5% to 0.5% for traders having a turnover of upto Rs.100 million for the tax year 2020. However, traders having a turnover of up to Rs. 100 million who have filed their returns for the tax year 2018 will be obliged to pay a tax equal to or more than the tax paid for the tax year 2018 for the tax years 2019 and 2020.

Moreover, a trader has been defined as an individual engaged in the buying and selling of goods in the same state including a retailer and a wholesaler, however, distributors have not been included in the definition.

Individuals with a turnover of Rs. 50 million or above in any of the preceding tax years are obliged to act as withholding tax agents whilst making payments for supply of goods, rendering of services or for the execution of contracts. Henceforth traders, being individuals and having a turnover of up to Rs. 100 million shall not
be required to act as a withholding agent under section 153 of the ordinance.

Smuggling Precious Stones and Jewelry

Regarding the smuggling of precious stones and jewelry, on smuggling of 15 tola gold/jewelry, it will be confiscated and an equivalent amount of penalty could be imposed.

Furthermore, the constitution and functioning of benches and procedure of the Appellate Tribunal may be regulated by rules approved by the Prime Minister, the FBR Member Customs Policy added.

You can further read more details about the ordinance here.

The post Govt Introduces Amendments for Income Tax, Smuggling Penalties & More appeared first on .

Originally Published on ProPakistani.com

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