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TwoSROs have been issued by the FBR (SRO 287(I)/2020 and SRO 288(I)/2020). The SROs have been issued to allow concession on duties and taxes on domestic supply and imports of goods.
On import of pulses, exemption from withholding income tax has been allowed by the Government till June 30, 2020, through SRO 287(I)/2020.
Also, on the import of pulses, imposed additional custom duty has been withdrawn by the FBR through SRO 288(I)/2020). The exemption is till June 30, 2020.
According to SRO 287(I)/2020, in case, the recipient of payment for goods supplied to utility Stores Corporation of Pakistan is a person other than a company, the rate of tax under section 53 shall be at 1.5 percent. The tax rate would be applied to the gross amount of payment, commencing till June 30, 2020, with immediate effect from the date of issue of notice, with respect to the supply of spices, salts, tea, dry milk, pulses, ghee, white flour, and sugar.
A number of measures are being initiated by the State Bank of Pakistan for supporting the economy in a hard time of Lockdown due to the Corona Virus outbreak.
The earliest measures by SBP include supporting the hospitals to meet their financial needs by providing them with a facility, named SBP Refinance Facility to Combat COVID-19 (RFCC). This measure was taken on the 7th of March 2020.
After this till now, SBP has been receiving different suggestions by the stakeholders for further improvements.
The SBP said that those suggestions have been kept In views, and it has been decided to provide further facilitation to the health sector under RFCC.
It has been said by the SBP that “such hospitals that are engaged in the fight against COVID-19 will be allowed to avail financing against their current equipment, and purchase of refurbished equipment. This would be allowed only if the equipment is being used in dealing with the pandemic by creating Special facility or isolation ward”.
Further, maximum coverage of civil works for setting up separate or isolation facility has been increased to 100%, previously it was at 60%. SBP has directed the banks to ensure the utilization of financing under RFCC only for intended purposes.
The belief of SBP is that hospitals and medical centers would be getting help by these measures in availing the Refinance facility of SBP with ease.
SBP had taken the measures for the facilitation of Bank customers by whom extraordinary challenges were being faced due to COVID-19. Such customers can ask the SBP through its helpline service, about the queries or complaints not being responded by the Commercial banks. Also, for the their facilitation, all banks have been advised by the SBP to ensure that their call centers and helplines are available every time for providing instant customer support.
To ensure the safety of staff of banks by maintaining a minimum level of staff, the Public is being encouraged by the SBP to use digital payment services as much as possible.
Punjab government has decided to reduce the capital value tax (CVT) and stamp duty by 2 percent on buying and selling property. Furthermore, sales tax has been reduced to zero percent on medical consultation and services being provided by the hospitals. Government of Punjab would be giving a tax incentive package of more than Rs18 Billion for sectors being affected by corona Virus, in the current year, said Finance Minister of Punjab Makhdum Hashim Jawan Bakht. Property tax and infra-structure development Cess has been postponed on immovable property owned by the citizens. Real estate and construction sectors are important for economic development and in evading unemployment. The sales tax rate on all online services has been brought to zero for the general public in this situation of lockdown, said Finance Minister. Similarly, for all such businesses and services belonged to human development, sales tax has been reduced to zero percent. All such businesses will be getting benefits from these facilities after they resume their activities after lockdown. Government of Punjab is well aware of the difficulties being faced by the business sectors, He added. In the financial budget of next year, all such sectors would be getting benefits which are playing a role in the development of the economy and also in evading unemployment from the country.
A comprehensive tax incentive package has been announced by Prime Minister of Pakistan Imran Khan on Friday 03-04-2020. The package is announced for the construction industry.
The prime minister announced the opening of the sector with effect from April 14, 2020.
In a talk to media persons, Prime Minister said that the government has taken a decision in coordination with the provinces. The decision has the aim of reviving the economic activities in the country, badly affected by the situation arising due to the Corona Virus outbreak.
Some of the key points of the tax incentive package are as follows:
Various incentives like tax incentives, waivers, and subsidies in areas of sales tax, capital gain tax, withholding tax, etc. have also been announced by the Prime Minister.
In providing details, Imran Khan said that no queries would be asked about the source of income from those investing in the construction sector during the year 2020.
The construction sector has been brought in the fixed-tax regime under which the rate of tax would be levied on the basis of per square yard and per foot for Land.
For those, making investments in the housing program by Prime Minister would be given the tax rebate of 90% and such persons would be required to pay only 10% of the total calculated tax amount.
Withholding tax would also be waived-off in cement and steel sectors.
In coordination with provincial governments of Punjab, Khyber Pakhtunkhwa and Sindh, Sales tax has been decided to bring down to 2 percent through consolidation of all taxes.
Capital Gain Tax on the sale of house is also being done away with.
Rs30 Billion subsidy has also been given on Naya Pakistan Scheme. Also, the further subsidy would also be given on its progress.
It has also been decided by the Government to give the status of Industry to the Construction sector.
To help promote the Construction industry in Pakistan, the Construction Industry Development Board (CIDB) will be established.
Previously, Rs1200 Billion stimulus package was announced by the Federal Government for providing the poor and daily wagers with financial relief in the situation of Lockdown due to COVID-19. And now Government has decided to open construction Sector.
There has been an approval of Rs75 Billion by the Economic Committee of the Cabinet (ECC). The fund has been approved for the Federal Board of Revenue (FBR) to make payment of tax refunds. This is done to make FBR able to pay back the sales tax and income tax refunds, duty drawbacks and customs duties which are due for the last 10 years.
Approximately 676055 beneficiaries will be able to improve their liquidity position with the help of this amount.
Grant of Rs30 billion to the Ministry of Commerce was also approved in the meeting of ECC. This grant is approved for the repayment of duty drawbacks to textile exporters in the current financial year in order to improve their liquidity position keeping in view the slowdown in businesses due to the outbreak of coronavirus outbreak worldwide.
