The government has finally taken the decision to remove all income tax provisions from the Finance Bill, 2021, relating to the powers of the Inland Revenue officers to arrest any person under the proposed Section 203A (power to arrest and prosecute) of the Income Tax Ordinance, 2001.
Following section may withdraw from the Finance Bill 2021: 1- Section 203A (power to arrest and prosecute); 2- Section 203B (procedure on arrest of a person); 3- Section 203C (special judges); 4- Section 203D (cognizance of offences by special judges), and 5- Section 203E (special judge, etc to have exclusive jurisdiction).
According to media reports, the Federal Board of Revenue (FBR) will hurt a revenue loss of Rs100 billion following withdrawal of budgetary proposal to impose FED on mobile phone calls and SMS @ Re1 per call (call exceeding three minutes), and Re0.10 per SMS. For example, the exemption granted to the inter-corporate dividend may restore under Section 103C. Following withdrawal of these revenue measures, the total revenue loss would stand at Rs120 billion.
Media sources said, that the government has initiated examining alternative taxation measures to control this shortfall of Rs120 billion. Firstly, the PTI government is considering to withdraw the proposal of ending withholding tax on banking transactions. This withholding tax on banking transactions may keep in Financial Year 2021-2022. Secondly, about 30-35 percent increase in the Federal Excise Duty (FED) on cigarettes. Thirdly, increase in the rate of the FED on beverages and aerated water.
Concealment of Income | Taxpayer Arrestment | FBR | Federal Board of Revenue | Withholding Tax | Cash Withdrawals | Budget | Finance Bill 2021 | Financial Year 2021-2022 | Withdrawal | Income Tax Returns | Inland Revenue Service |