close
Thursday March 28, 2024

Whiten Rs50m black money by paying 1 percent tax

By Muhammad Anis
January 02, 2016

Income Tax (Amendment) Bill 2016 tabled in NA

ISLAMABAD: Finance Minister Senator Ishaq Dar on Friday introduced the Income Tax (Amendment) Bill 2016 in the National Assembly which envisages amending the Income Tax Ordinance 2001, giving one-time tax amnesty to filers and non-filers. Under this scheme, a trader can whiten his black money up to Rs50 million by paying one percent tax.

The statement of objects and reasons of the proposed legislation is meant to give one-time opportunity to the return filer and non-filer traders to regularise their tax affairs by adopting a special and simplified procedure for assessment of their tax.

“The legislation is proposed in view of the prevailing tax culture of massive non-reporting and under-reporting in the country,” it said.The tax compliance scheme under this bill will apply only on profits and gains of a trader in respect of trading activities chargeable under the head ‘income from business’ and will not apply on professional services.

For trader qualifying for the scheme, working capital for the tax year 2015 shall not exceed Rs50 million and tax at the rate of one percent of the working capital shall be the tax payable on profits and gains for trading activity.

According to the bill, a tax rate of 0.2 percent would apply on turnover not exceeding Rs50 million, 0.15 percent tax rate in addition to Rs100,000 where turnover exceeds Rs50 million but does not exceed Rs250 million.

The proposed legislation says that a tax rate of 0.1 percent, in addition Rs400,000, will apply on the turnover, which exceeds the amount of Rs250 million.

In case of filer for the tax year 2015, the tax payable on profits and gains of trader, 25 percent higher tax would be paid than paid for the tax year 2014 or for the latest tax year for which return has been filed on the basis of taxable income.

For the tax years 2016 to 2018, the tax payable on profits and gains will be 25 percent higher on the basis of taxable income than paid for the preceding year.

The finance minister also introduced the Financial Institutions (Secured Transactions) Bill 2016 to provide for the creation of security interests over movable property and to establish a secured transaction registry.