ISLAMABAD   -   The federal government has projected to generate around Rs1.8 trillion through new taxation and enforcement measures in order to reach the mammoth tax collection target of Rs12.97 trillion for the next fiscal year.

The government has fixed the tax collection target at Rs12.97 trillion, which is 40 percent higher than the revised target of Rs9.25 trillion of the outgoing fiscal year. The Federal Board of Revenue (FBR) would need additional Rs3.7 trillion to achieve the next year tax collection target. The FBR on Wednesday informed the media that taxes worth of Rs2 trillion would be generated through GDP growth, inflation rate and from pending tax cases stuck in different courts. Meanwhile, additional Rs1.8 trillion would be collected through new taxation measures.

In revenue generation measures, the government has withdrawn various exemptions/zeros rating and reduced/fixed rates. Mobile phones would be taxed at standard rate (other than mobile phones valuing exceeding US$ 500 which will remain chargeable to existing rate of 25%).

The tax rates for non-salaried individuals and associations of persons and salaried individuals have changed. There is no income if annual income is up to Rs.600,000. Beyond this threshold, tax rates for non-salaried individuals have five taxable slabs with progressive tax rates ranging from 15% to 45%. For salaried individuals, beyond the threshold of Rs.600,000 per annum, there are five taxable slabs ranging from 5% to 35%.

Individuals earning Rs50,000 per month will be exempt from income tax. For those earning between Rs600,000 and Rs1.2 million annually, the income tax rate has been set at 5%. This means that individuals earning up to Rs100,000 per month will now pay a monthly tax of Rs2,500, up from Rs1,250. For annual incomes between Rs1.2 million and Rs2.2 million, the tax rate has been increased to 15%. Thus, individuals with a monthly salary of Rs183,344 will now face a monthly tax of Rs15,000, up from Rs11,667. Incomes between Rs2.2 million and Rs3.2 million annually will be taxed at 25%. Monthly salaries of Rs267,667 will see their tax rise to Rs35,834, up from Rs28,770. For those earning between Rs3.2 million and Rs4.1 million annually, the tax rate has been set at 30%. This means that individuals with a monthly salary of Rs341,667 will now pay a monthly tax of Rs53,333, up from Rs47,408. Meanwhile, an income tax rate of 35% will be applied to annual salaries exceeding Rs4.1

The government has imposed FED on acetate tow at Rs. 44,000. It has imposed FED on nicotine pouches @ Rs. 1200 per kg.  Meanwhile, FED at Rs. 15 per kg is proposed on supply of sugar to manufacturers. The rate of FED on cement is being enhanced from Rs. 2 per kg to Rs. 3 per kg. FED on commercial properties and first sale of residential properties has proposed at 5%. Rate of FED on filter rod to be enhanced from Rs.1500 per kg to Rs.80,000 per kg.

A new tax rate for a new category of persons who are late filers i.e. they become filers after the due date of filing of return only for the sake of a specific transaction to avoid higher rates for non-filers. For such late filers a new tax rate is being introduced which is higher rate as compared to filers but lower than the non-filers.

On purchase of property by filers, the rates of tax would be 3% for values of properties up to 50 million, 3.5% for values of properties between 50 million and 100 million, and 4% for value of properties above 100 million. Late-filers would face slightly higher rates: 6%, 7%, and 8% respectively for the same property value brackets. Non-filers would experience significantly higher rates, set at 12% for properties up to 50 million, 16% for 50-100 million, and 20% for properties exceeding 100 million.

The proposed progressive advance tax rates at source for filers on sale of immovable property are 3% for properties valued up to 50 million. For properties valued between 50 million and 100 million, the withholding tax rate is 4%, and for properties valued above 100 million, the rate is 5%. For non-filers, the rate is 10% for properties of any value. Further, for late filers, the rate of tax will be 6%,7% and 8% respectively depending on the value of property.

A flat 15% rate of tax on gains from the disposal of immovable property acquired on or after 01st July, 2024 by filers regardless of the holding period is proposed, and for non- filers, progressive tax rates based on the prescribed slab rates in Division I of Part I of the First Schedule, with a minimum tax rate of 15% is proposed.

It has been proposed to bar the exit from Pakistan of such persons with exceptions for Hajj and Umrah travelers, minors, students, overseas Pakistanis and such other classes of persons as notified by the Board. In case the implementing agencies do not block sims or disconnect utility connections or not comply with bar on foreign travel, a penalty of Rs.100 million will be imposed upon the implementing agency for first default and Rs.200 million for each subsequent default. Penalties and prosecutions are proposed for entities failing to fully disclose relevant particulars or submitting incomplete information in their tax returns or failure to file return on discontinuation of their business. Further, penalty of sealing of shops is being proposed for traders and shopkeepers who fail to register under a scheme such as Tajir Dost Scheme. Further, failure to register by a shopkeeper or trader is proposed to be made an offence punishable on conviction with imprisonment for six months or with fine, or both.