Govt's Tax Ratio will Cost around Rs. 506 bln in Budget 2021

Govt’s Tax Ratio will Cost around Rs. 506 bln in Budget 2021

The federal government has taken action of around Rs. 506 bln, including fiscal measures of Rs. 264 billion and implementing measures of Rs. 242 billion in the Budget 2021-22.

The tax authorities informed the media at FBR headquarters that tax measures totaling Rs.383 billion had been proposed for 2021-2022.

The total relief effort amounted to Rs. 119 billion. The net impact of the measures was Rs. 264 billion. The FBR has taken customs measures of 52 billion rupees and relief measures of 42 billion rupees. The net impact of the tariff measures was 10 billion rupees.

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Federal sales tax/excise measures totaled Rs.215 billion, while sales tax reliefs totaled Rs.19 billion. The net effect of the sales tax measures is Rs. 196 billion.

Income tax measures were projected at Rs 116 billion while the relief of Rs 58 billion was granted. The net impact of the tax measures was Rs. 58 billion.

Members of the RBF said the enforcement actions would generate revenues of Rs 242 billion. They said the government has lowered the monthly electricity bill threshold for withholding tax on electricity consumption from 75,000 to 25,000 for household customers who are not on the active taxpayer list.

As part of the Financing Act 2021, it is proposed that the zero-rating for crude oil, for parts/components of zero-rated systems and machines, for the import of systems and machines by the oil and gas sector, as well as for delivery, repair, and maintenance of ships.

The FBR will generate revenues of Rs 38 billion thanks to this tax measure. FBR members said the FBR did not change the income tax brackets for the salaried employee and the FED for cigarettes.

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However, the FBR abolished flat-rate taxation of property income and switched to the normal tax system; Reduce total tax on capital gains on property sales if the capital gain exceeds Rs. 20 million and reduce total tax on interest income if they exceed Rs. 5 million.

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