Prime Minister Shehbaz Sharif Saturday gave go-ahead to the Federal Board of Revenue (FBR) to finalize the budgetary measures of over Rs. 400 billion for the upcoming budget (2022-23).

A top government official told ProPakistani that Finance Minister Miftah Ismail, FBR Chairman Asim Ahmad and FBR Member Inland Revenue Policy briefed the premier on new budgetary measures for the new fiscal year. The chairman along with his team went to Lahore to brief the prime minister to finalize the new budget proposals with new taxation measures of more than Rs. 400 billion for FY23.

The FBR shared the strategy including enforcement and administrative measures to meet the Rs. 7.2 trillion revenue collection target for FY23.

The premier was also informed about the proposed changes in the income tax slabs for the salaried class. There are 1.9 million salaried taxpayers and the demand is to generate additional Rs. 80 billion from the salaried class, earning Rs. 1 million to Rs. 6 million per annum.

Around 70 percent of the salaried taxpayers fall within the slabs of Rs. 1 million to Rs. 6 million per year. The FBR will go to any extent to avoid this measure of heavy taxation on the salaried class except for those earning very high salaries.

A major chunk of the higher tax to be generated from the salaried class is expected to be covered from taxation of high revenue earnings sectors in the coming budget. According to sources, the taxation proposals for these profit-earning sectors would help the budget markers to avert possible heavy taxation on different slabs of the salaried class.

Tax authorities informed the premier that a time-bound levy or additional income tax is proposed to be levied on the annual income/profits earned by the steel sector, pharmaceutical industry, and other profit earning sectors. There is also a proposal to raise the minimum tax from two to six percent on the import of edible oil in FY23 budget.

Finance Bill 2022 is expected to introduce a new concept of tax, i.e., ‘Windfall Levy’ in the Income Tax Ordinance, 2001 for special taxation of the potential sectors making extraordinary profits, but not depositing the due amount of taxes.

The FBR will collect the levy from sectors earning extraordinary profits during the last few years. This levy would be a separate tax and would be collected along with the income tax deposited every year.

Source: Pro Pakistani