Pakistan Yet to Decide on Reversing Tax Increase for Salaried Class

The Federal Board of Revenue (FBR) Chairman, Amjed Zubair Tiwana, has clarified that the government has not made a final decision on reversing recent tax increases for salaried individuals proposed in the Finance Bill 2024.

Key Points:

  • FBR Chairman denies confirmation of revising proposed tax slabs for salaried class.
  • Senate Finance Committee directs FBR to discuss telecom tax measures with industry.
  • Telecom operators concerned about 75% advance tax on mobile services for non-filers.
  • Potential for legal disputes and foreign investment flight in telecom sector.
  • Telecom infrastructure not equipped to handle multiple tax rates.
  • Telecom industry proposes gradual implementation and collaboration on tax compliance.

Salaried Class Tax Increase Under Review

During a media interaction, Chairman Tiwana did not confirm whether the government intends to revise the proposed tax slabs impacting salaried individuals in the Finance Bill 2024. He stated that no final decision has been made regarding potential relaxation for this segment.

Telecom Sector Objects to Proposed Tax Measures

The Senate Standing Committee on Finance has directed the FBR to engage in discussions with the telecom sector to review proposed tax measures. These measures include:

  • 75% advance tax collection on mobile services for non-filers.
  • Penalties for telecom companies acting as “enablers” of uncollected Income Tax General Orders (ITGOs).

Telecom Industry Concerns:

Telecom operators expressed concerns about these measures, citing potential consequences:

  • Increased operational inefficiencies and consumer costs due to handling multiple tax rates.
  • Frivolous legal disputes arising from implementing the new tax regime.
  • Discouragement of foreign direct investment in the telecom sector.

Telecom Infrastructure Challenges:

The industry highlighted infrastructure limitations:

  • Current systems are not equipped to handle the proposed 75% advance tax for non-filers.
  • Implementing multiple tax rates would create operational complexities.

Alternative Proposals from Telecom Industry:

Telecom operators proposed a collaborative approach:

  • Focus on raising tax compliance awareness among citizens.
  • Implement new tax policies gradually to avoid disruption.

Overall, the issue of tax changes in Pakistan remains unresolved. While the FBR reviews potential adjustments for salaried individuals, the telecom sector seeks collaboration with the government to find solutions that balance tax collection efforts with industry sustainability.

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