National Assembly committee approves five percent withholding tax on unregistered businesses

The National Assembly’s Standing Committee on Finance has approved a five percent withholding tax, setting a sales limit of up to Rs 20 million per year for unregistered shops and businesses.

The committee expressed serious reservations over the request for a 15-year tax exemption on new aircraft and their parts after the privatization of PIA and summoned Privatization Advisor Muhammad Ali for a meeting.

FBR officials said that currently PIA enjoys a one-year tax exemption on new aircraft and parts. National Assembly Member Sharmila Farooqui opposed the proposal and said that 15 years is far away, even a five-year exemption is not appropriate.

The committee, while deferring the approval of the proposed tax exemption, gave the government the option to either withdraw these incentives or provide them equally to all airlines.

FBR officials said that approval has also been given to include 116 more items in the third schedule of the sales tax law, which is expected to generate an additional revenue of Rs50 billion annually.

The committee also approved proposals to abolish the one percent advance tax imposed on exporters, impose a five percent withholding tax on income earned from social media, and calculate the basic cost of inherited property from the date of transfer after death.

The meeting was held under the chairmanship of Syed Naveed Qamar.