Islamabad: The federal government has started considering imposing a 5 percent special income tax on manufacturing.
Government sources said that Prime Minister Shehbaz Sharif did not consider the proposal to impose a regulatory duty on 860 product lines instead of allowing their imports. In the case of enforcement of regulatory duty, revenue could be generated to provide tax concessions for five key sectors.
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special income tax on manufacturers
Sources say that in the upcoming meeting with the Prime Minister, efforts will be made to convince him to lift the ban on imports in return for the implementation of the duty. Sources say that several meetings have been held in the Ministry of Finance to finalise the mini-budget. A meeting was also held at the Prime Minister’s House.
The government is considering levying a 1 to 5% special income tax on manufacturers who have an annual turnover of Rs 5 crore or more but export less than 10% of their output.This special income tax will be levied in place of Supertax, but its threshold will be Rs 5 crore, as opposed to Rs 15 crore for Supertax.
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Some industries will be exempted from the new tax under a “negative list’, sources said. Sources say that the move by the government could stop Pakistan from becoming more industrialised because manufacturing is already heavily taxed.
Speaking to The Express Tribune, Finance Minister Miftah Ismail confirmed that in place of the 4 per cent supertax, a proposal to levy an income tax of up to 5 per cent on manufacturers who do not export anything.
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