Budget 2015-16 New Tax on Rich People’s Electricity Bills Likely - 29-05-2015

8/18/2019 Budget 2015-16 New Tax on Rich People’s Electricity Bills Likely - 29-05-2015

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Budget 2015-16: New tax on richpeople’s electricity bills likely

ISLAMABAD: In its continuing efforts to make Pakistan’s

wealthy elite pay taxes the go!ernment may impose a "#$% withhol&ing tax on electricity 'ills of greater than (s$))))

per month as well as &ramatically increasing the taxes on

air passengers flying first or 'usiness class to international

&estinations#

Prime Minister Nawaz Sharif is said to have cleared a proposal from the

Federal Board of Revenue (FBR) to levy a 7!" withholdin# ta$ on

monthly electricity consumption of Rs!%&%%% and more from 'uly this

year& said sources in the Finance Ministry

he FBR had ori#inally proposed a threshold level of Rs!&%%% per

month for the fiscal *%+! ,ud#et (which ends 'une % of this year) he

federal ca,inet& however& only allowed the FBR to levy the withholdin#

ta$ on ,ills #reater than Rs+%%&%%% per month For fiscal *%+-& the FBR

proposed lowerin# the threshold all the way down to Rs*!&%%% ,ut the

prime minister has only approved withholdin# at twice that level

.ithholdin# ta$es are the #overnment/s way of forcin# people to pay an

income ta$ and encoura#in# people to file their ta$ returns hose who

file their ta$ returns each year can claim those withholdin# ta$es as a

credit a#ainst their income ta$ lia,ilities 0f they paid more than they

owed& they are entitled to a refund from the #overnment .ithholdin#

ta$es already e$ist on post1paid cellphone ,ills& phone ,ills and other

utility ,ills& as well as on lar#e withdrawals from ,an2 accounts

FBR officials li2e imposin# withholdin# ta$es ,ecause they can

theoretically increase collection of ta$es without havin# to en#a#e in

e$tensive audits of ta$payers/ assets and incomes 0t also ,rin#s in

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revenue from people who can clearly afford lu$urious lifestyles ,ut are

not payin# any ta$es 3owever& officials admit that in order to evade the

withholdin# ta$ on electricity& most wealthier households simply

installed more than one electricity meter 4ollection from this ta$&

therefore& was much lower than FBR e$pectations

he FBR has also not ,een a,le to encoura#e people to file their ta$

returns For the out#oin# fiscal year& the FBR had a tar#et of increasin#

the num,er of ta$ filers from the current 56%&%%% to +* million

3owever& at a recent hearin# of the Senate Finance 4ommittee& FBR

4hairman ari Ba8wa admitted that the FBR had only #otten the

num,er of filers up to 57!&%%% and was on trac2 to only #et the total

num,er to 9%%&%%% ,y the end of the fiscal year

he prime minister chaired a meetin# on ta$ation proposals for the new

fiscal year on hursday& accordin# to an official handout For fiscal

*%+-& the FBR has ,een assi#ned a Rs+ trillion1ta$ tar#et& said FBR

chairman ari Ba8wa he #overnment will withdraw Rs+% ,illion worth of Statutory Re#ulatory :rders (SR:s) ,esides levyin# additional

ta$es of around Rs+%% ,illion in the new ,ud#et& said sources familiar

with the matter

0n a similar move& the #overnment has proposed to drastically increase

the withholdin# ta$ rates on first class and ,usiness class air

passen#ers to Rs+-&%%% per tic2et& said officials familiar with the

deli,erations hey added for the ,usiness class or other than economyclass international air passen#ers& the proposed rates are Rs+*&%%% per

tic2et For the economy class passen#ers there will ,e no ta$& said the

sourceshe #overnment may also declare federal e$cise duty imposed

on domestic and international air tic2ets non1ad8usta,le from the new

fiscal year& said the sources



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Published in The Express Tribune, May 29 th, 2015.

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Budget 2015-16 New Tax on Rich People’s Electricity Bills Likely - 29-05-2015