PIDE-PRIME Tax Reforms Commission: Revenue With Growth

Objectives & Parameters of a new tax policy

1. A citizen friendly, transparent, stable and predictable tax regime to stimulate growth and investment
2. Simplification & harmonization to facilitate taxpayers and ease of  paying taxes
3. Automation & digitization to eliminate direct interface between the taxpayer and the tax authority

Summary & Key Points

INCOME TAX

1. Uniformity of tax regime on all sources of personal and non-corporate incomes
2. Corporate tax rate to be decreased to 25%
3. Withdrawal of deemed rental income tax, CVT, super tax, turnover tax, presumptive/final tax
4. Restoration of investment credits for plant and machinery

CUSTOMS TARIFFS

5. Zero-rated import of Plant and Machinery, industrial raw materials and intermediate goods
6. Withdrawal of regulatory and additional custom duties and withholding of income tax on imports

GENERAL SALES TAX

7. Harmonisation of GST/VAT
8. Gradual reduction of VAT to 10%
9. No new exemptions on GST except in areas such as education and health

WITHHOLDING TAXES

10. Reduction in the number of Withholding Taxes and complete roll-back of WHT regime except, in the long-run, on pay-roll, interest, dividends and payments to non-residents

TAX ADMINISTRATION

1. Mandatory registration in GST starting in the first phase with commercial importers, wholesalers and tier-1 retailers
2. Automation and Digitization to reduce interaction between taxpayers and tax authorities
3. Abolishment of non-filer category
4. Enhancement in capacity of PRAL
5. Formation of a Pakistan Fiscal Policy Institute/Budget Office for Parliamentarians

 
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