ISLAMABAD: In order to boost investment in the country, measures were introduced through the Finance Supplementary (Second Amendment) Bill, 2019. In furthering the policy of encouraging investment, various measures were intensively discussed with stakeholders after presentation of the Finance Supplementary (Second Amendment) Bill, 2019 in the House. The Senate of Pakistan completed its reading of the Bill and also gave recommendations. Various chambers of commerce and industry and other associations also came up with their critique of the Bill and gave proposals. All the valuable proposals and recommendations were examined and in light of these, I would like to propose the following amendments to make the Finance Supplementary (Second Amendment) Bill, 2019 more-comprehensive and investment friendly: Amendments in Customs Act, 1969
2. In order to provide an additional incentive, import of plant and machinery by greenfield industrial undertaking has been proposed to be exempt from customs duty.
3. In order to provide further incentive to the industrial undertakings set up in the Special Economic Zones, exemptions from customs duty and advance income tax on import of firefighting equipment have also been proposed.
Amendments in the Sales Tax Act, 1990
4. It was proposed in the Finance Supplementary (Second Amendment) Bill, 2019 that in order to facilitate the exporters and other businesses, the outstanding sales tax refunds shall be liquidated through issuance of Promissory Notes or bonds by FBR. It has now been decided that the proposed bonds shall be issued by FBR Refund Settlement Company (Pvt) Limited, a fully owned company of FBR.
Amendments in the Income Tax Ordinance, 2001
5. In order to address the concerns of local manufacturers of motor vehicles, it has been proposed to allow non-filers to purchase locally manufactured vehicles irrespective of engine capacity.
6. As an additional tax incentive to encourage investment in the green field projects, it has been proposed to exempt business income of the green field industrial undertaking for a period of five years. Further it has been proposed to exempt such industrial underlings from minimum tax on their turnover.
7. As an additional measure, it has been proposed to exempt advance tax on profit paid on Pakistan Banao Certificate, SARMAYA-E-PAKISTAN LIMITED and Duty Drawback Bonds.
8. Incentives were proposed through Finance Supplementary (Second Amendment) Bill, 2019 for Banks on advancing loans for agriculture, low cost housing and micro, small and medium enterprises. It has been proposed to further streamline these incentives.
9. Through Finance Supplementary (Second Amendment) Bill, 2019 reduction in tax liability for inter-corporate dividend was proposed. It is proposed to exempt such dividend derived by a company if the company avails group relief according to the proportion of shareholding of the company.
Amendments in the Federal Excise Act, 2005
10. In the Finance Supplementary (Second Amendment) Bill, 2019 10% federal excise duty was proposed for locally manufactured motor vehicles of engine capacity of 1800 cc and above. However in order to address the concerns of local manufacturers of motor vehicles, the proposed engine capacity is proposed to be revised to 1700cc.