Federal Budget 2005 - Icap-karachi

8/9/2019 Federal Budget 2005 - Icap-karachi

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FEDERAL BUDGET 2005-2006

By

SYED SHABBAR ZAIDI, FCA

PARTNERA.F. FERGUSON & CO.

The I !"#"$"e % Ch'("e(e) A**%$ "' "! % P'+#!"'

ARACHI

%$ e /, 2005


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TABLE OF CONTENTS

• C% * $!#%• The The1e• T($!" ' ) Re #' *e• #!*% *e3"#% ' ) U )$e Fe'(!• Re' #4'"#% % Re' #"#e! %( B'*+ T('*+#• S' e! T' % Se(7#*e! - Relief for the Manufacturing Sector• 8D$9'# %( %(e':• The B% ) S"e3 - Zero Rating for Local Sales of Export Oriented

Industries • Re $ )! A '#• C(%!! '"*h# - Documentation of Information• Fe)e(' E *#!e• S1' C%13' #e!• The T'!+ Ahe')


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CONCLUSION

•

A %%) ' ) (e'!% '9 e B$) e"

• I ;% )e( # "he(e #! ' y %"he( !% $"#%


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THE THE E

The The1e % "h#! B$) e" #!=• PUBLIC-PRI>ATE PARTNERSHIP

?• S ALL AND EDIU SIZE ENTERPRISES, COUPLED @ITH

INCENTI>ES FOR CORPORATIZATION?

• RELIEF FRO TA ES FOR E PORT ORIENTED INDUSTRIES

Th#! THREE PRONGED APPROACH #! ' (e7% $"#% '(y !"e3. I" #!"he (e!$ " % 3(% (e!!#7e "h# +# ;he(e y%$( # !"#"$"e h'! 3 'ye)' e e*"#7e (% e. The(e #! % "#1e "% *(#"#!#4e. @e !h%$ ) %%+ %(!% $"#% !.


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ISCONCEPTION AND UNDUE FEAR

• A! ' '"#% ;e h'7e "% e" (#) % *y #*#!1.

• I 6, ;he >AT ;'! #13 e1e "e) # $ !*' e, # 1y #(!")e"'# e) )e #9e('"#% % >AT, '" "h'" !"' e, I !'#) INDTHE GAP , N%;, I !"# !'y "he !'1e "h# , h%;e7e(, %7e( "eye'(! 3(% (e!!#7e #!*' 3% #*#e! h'7e e) 1e "% 9e #e "h'""he GAP ;# ' ;'y! 9e # e) 9y GRO@TH , # 3% #*#e!(e1'# *%((e*".

• The(e #! % !3'*e %( e; "' e!. O7e(' # *#)e *e !h%$ )

9e (e)$*e). GDP (%;"h ;# (e!$ " # # *(e'!e) "' e!.• Th$! R! 6 0 B# #% #! %" ' 9# "'!+. INSHA-ALLAH #" ;#

9e '*h#e7e).


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TRUST AND RELIANCE-

FACTS AND FIGURES

RUPEES IN BILLION

2004-2005 2005-2006 INCREASE

Custom Duty 113.90 121.200 7.30

Sales Tax 239.00 294.00 55.00

Federal Excise 54.400 59.40 5.00TOTAL 407.30 474.60 67.30

The(e #! % e; "' . I *(e'!e # (e7e $e #! e 3e*"e) (%1 e*% %1#*(%;"h. E 3e*"e) Re7e $e (%1 (%;"h #! '(%$ ) R! 0 9# #% .

I e e*" "he(e #! ' (e)$*"#% # "' e! ' ) )$"#e!.


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TRUST AND RELIANCEC% " )

FACTS AND FIGURES• I P'+#!"' "he(e #! % B$) e" De #*#" . The(e $!e) "% 9e T($!"

De #*#" ;h#*h h'! !$9!"' "#' y (e)$*e). T($!" De #*#" 9e";ee "'3'ye(! ' ) "' *% e*"%(. G%7e( 1e " ' ) "he 3e%3 e.

• L'!" ye'( ' !% "he(e ;'! % e; "' ' ) P'+#!"' Pe%3 e ' )G%7e( 1e " % P'+#!"' '*h#e7e) "he "'( e" "h(%$ h (%;"h. I"he % %;# ye'( ' !% "he !'1e "(e ) ;# INSHA-ALLAH 9e'*h#e7e).

• S%1e % "he e # e! % (%;"h ;e(e= – A (#*$ "$(e – Te "# e ' ) %"he( e 3%(" %(#e "e) !e*"%( – Se(7#*e Se*"%( – O"he( '( e !*' e 1' $ '*"$(#

• O$" % "he !'1e, F#(!" "h(ee )% %" e e*"#7e y *% "(#9$"e %(# )#(e*" "' e!. S% ;h'" #! "he e'( %( $"$(e *% e*"#% .


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REALIZATION OF REALITIES OR BAC TRAC ING

• The(e ;e(e !$**e!!e! ' ) 3(%9 e1! # >AT

#13 e1e "'"#% . H%;e7e(, (%;"h %7e( "he "e ye'( 3e(#%)(%1 6 "% 2005 h'! 9ee e 3% e "#' # *(e'!e (%1 09# #% "% R! /00 9# #% #.e. 500 3e( *e " .

• I 200 9$) e", 1'J%( 3(%*e)$(' #((#"' "! ;e(e (e1%7e).

• The K$e!"#% ' "e( (e7#e;# 2005 9$) e" #!

ARE @E BAC TRAC ING


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REALIZATION OF REALITIES OR BAC TRAC ING C% " )

• The(e #! % 9'*+"('*+# # 3(# *#3 e. H%;e7e(,"he(e h'7e 9ee *e("'# !"e3! ;he(e ' "# " #

3(% (e!!#7e '33(%'*h h'! 9ee e ". The!e '(e= – Abolition ( ero!rating" of sales tax on local

sales of export oriented industries#

–

Extension of le$% of tax at retail price b%manufacturer for further items# and

– Minimum $alue addition concept introduced in&'' )


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REALIZATION OF REALITIES OR BAC TRAC ING C% " )

– A! ' 3% #*y 1e'!$(e ' "he!e '*"#% ! !h%$ ) %" h'7e9ee "he(e, h%;e7e( "he(e '(e *e("'# (%$ ) (e' #"#e!,;h#*h h'7e e) "% "he !"e3! '9%7e.

– The!e # * $)e "he #!!$e! % RELEASE ' )GENUINENESS % (e $ )!.

– Re $ )! ;e(e '(%$ ) R! 50 B# #% . The '*"#%$ )e("'+e #! # # e ;#"h "he 3(# *#3 e % Le7e P 'y#F#e ) %( ' e 3%("e(!.

– R! 50 9# #% ;# %; 9e '7'# '9 e %( e;IN>EST ENT .


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SALES TA ON SER>ICES - RELIEF TOANUFACTURING SECTOR

• E13 %y1e " (%;"h ' ) 3%7e("y ' e7#'"#% #! )#(e*" y(e '"e) "% (%;"h # "he 1' $ '*"$(# !e*"%(. N%; '!$9!"' "#' (e7e $e 9'!e h'! 9ee '*h#e7e).

• N%;, "he(e #! ' ee) "% 3(%7#)e *e("'# (e #e "% "he1' $ '*"$(# !e*"%(.

• Ze(% ('"# %( "he %*' !' e! % e 3%("! # )$!"(#e! #! ' !"e3

# "h'" )#(e*"#% .


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SALES TA ON SER>ICES - RELIEF TOANUFACTURING SECTOR

C% " )

• The(e h'! "% 9e eK$#"y %( "he # *#)e *e % "' #(e '"#% "% ' $ '*"$(# Se*"%( .

• I *#)e *e % # )#(e*" "' % 1' $ '*"$(# !e*"%(9e (e)$*e) ' ) *e("'# 9$()e h'! "% 9e !h'(e)9y "he !e(7#*e !e*"%(.

• A! ' 3% #*y 1e'!$(e #" ee)! "% 9e '33(e*#'"e)"h'" e "e !#% % >AT % !e(7#*e! h'! %" 9ee

#7e )$e 3(#%(#"y. Th#! 1'""e( #! e""#*% $!e). I "he '( e( '"#% ' # "e(e!", # "('-3(%7# *#' #!!$e! % "h#! 1'""e( h'7e "% 9e !%("e)%$".


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CATCH 22 DUBAI OR OREA

CUSTO DUTY AND SUR>I>AL OF LOCAL

INDUSTRY• O #13%(" )$"#e! !"($*"$(e ;e '(e # C'"*h 22 !#"$'"#% . O

% e h' ) "he(e #! ' #!!$e % S1$ # P(% e #"e1! ' )% "he %"he( h' ) "he(e #! "he 3(%9 e1 % S$(7#7' % L%*'I )$!"(y .

• O"he( "h' "he '9%7e, "he(e '(e Ch# e!e G%%)! .

• S1' !*' e %*' # )$!"(#e! '(e * %!# )%; . N%; ' (e #eh'! 9ee 3(%7#)e) "% e 3%("-%(#e "e) # )$!"(#e!.

• Th#! #!!$e )#(e*" y (e '"e) "% "he #!!$e % e13 %y1e " ' )3%7e("y ' e7#'"#% .

• Th#! h'! %"h# "% )% ;#"h @TO. The #!!$e (e '"e! "%*'!*')# ' ) e7e 3 'y# #e ) ' '# !" #13%("!

• The(e #! ee) %( ' *%13(ehe !#7e T'(# S"$)y .


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CATCH 22 DUBAI OR OREA

CUSTO DUTY AND SUR>I>AL OF LOCAL

INDUSTRY• T(#*+ e )%; e e*" ;# "'+e "#1e M.


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THE BIG CHANGE- ZERO RATING FOR LOCALSALES OF E PORT ORIENTED INDUSTRIES

The F'*"!

• E "#(e *h'# % %*' !' e % "he % %;# e 3%(" %(#e "e)# )$!"(#e! h'! 9ee 4e(%-('"e). N% %$"3$" "' , # 3$", # ' y,(e $ )'9 e, # * $)# $"# #"#e!=

– Te "# e ' ) Te "# e A("#* e! – Le'"he( ' ) A("#* e! "he(e% – C'(3e"! –

S3%("! G%%)! – S$( #*' G%%)!

• Ze(%-R'"# #! e e*"#7e (%1 $ e 6, 2005 SRO 5/5


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THE BOLD STEP - ZERO RATING FOR LOCALSALES OF E PORT ORIENTED INDUSTRIES

C% " )

• B'!#* ('; 1'"e(#' ! %( !$*h # )$!"(#e! h'7e ' !% 9ee 4e(%('"e).

• I" ee)! "% 9e * e'( y $ )e(!"%%) "h'" "h#! #!" *' e7e( 9e*%13 e"e '! %"he(;#!e "he(e ;# 9e '*$"e 1#!'33 #*'"#% .

• F%( (e1'# # #"e1! (e $ )! '(e '7'# '9 e.

• U )e( SRO 52 % e 3%("e( ;# 9e ' %;e) (e $ ) %!"%*+! ' "e( $ e /0, 2005. D'"e ee)! "% 9e (e7#!e).


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THE BOLD STEP - ZERO RATING FOR LOCALSALES OF E PORT ORIENTED INDUSTRIES

C% " )• A! %*' !' e! h'7e 9ee 4e(%-('"e) "he(e %(e ' /

3e( *e " (e"'# "' h'! 9ee e7#e) % (e"'# e(! %3(%)$*"! % !$*h e 3%(" %(#e "e) # )$!"(#e!.H%;e7e(, "h#! ;# % y '33 y "% (e"'# e(! ;he(e"he "$( %7e( e *ee)! 5 1# #% . I e e*" "h#!1e' ! e e13"#% %( *% !$1e(!.

• Th$! % %;# *% !$1e( %%)! *' 9e*%1e

*he'3e(= – Te "# e – Le'"he( e"*.


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A NESTY - FOR ALL PAST LIABILITIES

• O e "#1e '1 e!"y %( ' '))#"#% ' "' ' )3e ' "y 3'y'9 e, # "he 3(# *#3' #'9# #"y #!

7% $ "'(# y )e3%!#"e) 9y $ e /0, 2005.• I" h'! ye" "% 9e * '(# #e) "h'" "h#! '1 e!"y ;#

' !% 9e '33 #*'9 e ;he(e 3(# *#3' '1%$ " h'!9ee 3'#) SRO 520 .


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REFUNDS AGAIN

• The (# h" "% C'((y F%(;'() e *e!! # 3$" "' "%"he % %;# 3e(#%) %( 3e(#%)! '9% #!he). N%;

$ '1%$ " #! (eK$#(e) "% 9e (e $ )e).• Th#! 1e' ! (e $ )! ' '# .

•

Th#! '1e )1e " ee)! "% 9e (e-e '1# e).


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SALES TA AT RETAIL PRICE

• Th#! #! ' )e7#'"#% (%1 >AT, #" !h%$ ) 9e '7%#)e).

• S*%3e % e7y % !' e! "' % (e"'# 3(#*e 9y "he1' $ '*"$(e( $ )e( "he Th#() S*he)$ e e "e )e)"% *% !$1e( #"e1! #+e !%'3, )e"e( e ",3e( $1e(y *%!1e"#*!, !h'7# *(e'1,"%%"h3'!"e, !h'13%%!, "e', e"*.

• Th#! '1e )1e " # (e '"#% "% #13%("e) #"e1! %!'1e ee)! "% 9e (e-e '1# e).


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CROSS ATCHING A STEP TO@ARDS DOCU ENTATION

• A 7e(y 3%!#"#7e '33(%'*h. A !"e3 "%;'()!)%*$1e "'"#% .

• S3e*#' 3(%*e)$(e! "% 9e # "(%)$*e) %(3(e!*(#9# !$11'(y % 3$(*h'!e ' ) !' e! %(*(%!!-1'"*h# % # 7%#*e! %( ' !e*"%(! e *e3""h%!e ;h#*h h'7e 9ee !$9Je*"e) "% 4e(% ('"e %

!' e! "' . S$*h )e"'# ! "% 9e 3(%7#)e) 9y 5"h

%"he % %;# 1% "h.


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FEDERAL E CISE

• Ce "(' E *#!e! A*", ' ) "he Ce "(' E *#!e! R$ e!, !$9!"#"$"e) ;#"h e e*" (%1 $ y , 2005 ;#"h "he

Fe)e(' E *#!e A*", 2005 ' ) Fe)e(' E *#!e R$ e!, 2005(e!3e*"#7e y.

• U )e( "he e; A*" ' ) R$ e! "(')#"#% ' #*e !# ' );'(eh%$!# !y!"e1! h'7e 9ee '9% #!he).

• A)J$!"1e " % e *#!e )$"y 3'#) % # 3$"! $!e) # "he1' $ '*"$(e % %%)! % ;h#*h e *#!e )$"y #! 3'y'9 e %(h'! 9ee 3'#), e *e3" %( 9e7e(' e *% *e "('"e. E *#!e)$"y 3'#) % *% *e "('"e #! %" ')J$!"'9 e.

• @h% e !y!"e1 "% %3e('"e % !e -* e'(' *e, !e -'!!e!!1e " ' ) !e *%13 #' *e 9'!#!. E *#!e !"' 3%!"e)# e *#!'9 e $ #"! "he(e %(e ;#"h)('; .


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S ALL CO PANIES

• A "e( ' % )e #9e('"#% , # %()e( "% 3(%7#)e 9%%!" "%*%(3%('"#4'"#% , )%*$1e "'"#% ' ) (e #e (%1 "' e! ' ;e

'#) )%; !"('"e y h'! 9ee ')%3"e) %( S1'C%13' #e! . The )e # #"#% % !$*h ' *%13' y *' 9e)e9'"e), h%;e7e(, '! ' *% *e3", "he(e *%$ ) %" 9e '

!e*% ) 7#e;.

• N%;, #" #! "he (% e % ICAP "% 3(%7#)e, ' ;%(+'9 e1e*h' #!1 %( '**%$ "# , (e3%("# , ' ) '$)#" % !$*h*%13' #e!. I" ee)! "% 9e *% !#)e(e) "h'" #" #! ' % -"e(1!"('"e y. ICAP !h%$ ) '*" '! ' *% )$#" # '*h#e7# "he$ "#1'"e %' . I" ;# (e'" y 9%%!" "he 3(% e!!#% .

• 2005-2006 B$) e" ;# ' ;'y! 9e !ee '! ' h#!"%(#*')%*$1e " %( "h#! *h' e.


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TAS AHEAD

• O "he 3% #*y !#)e, "he !$ e!"#% ! ' ) "he !"e3!$ )e("'+e '(e % (# h" )#(e*"#% . The(e #! ' ee) %(*% "# $'"#% ' ) *% !#!"e *y % 3% #*#e!.

• The(e *%$ ) 9e !%1e )# #*$ " "#1e # 9e";ee , h%;e7e(, "hee ) ' ) "he ;'y "%;'()! "he e ) h'! 9ee (# h" y#)e "# #e).

• @he ;e h'7e )e*#)e) "% 1'+e "h#! *%$ "(y ' e # h"e e)

)e7e %3e) !"'"e "he "he(e *%$ ) 9e !%1e )# #*$ " "'!+;h#*h "h#! '"#% h'! "% %7e(*%1e.

• @h'" ;e '(e )%# #! %( "h#! '"#% ' ) %$( $"$(ee e('"#% !.


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I "h' + y%$

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Federal Budget 2005 - Icap-karachi