ISLAMABAD-The PML-N government has given massive tax exemptions worth Rs 477 billion during outgoing financial year 2013-2014 to the different sectors.
The tax exemptions have surged to Rs 477 billion during outgoing fiscal year, which was only Rs 240 billion during previous year 2012-2013. Therefore, the volume of tax exemptions has massively increased in the first year of PML-N government. However, Finance Minister Senator Ishaq Dar on Monday, addressing the launching ceremony of economic survey, said that government would eliminate tax exemptions worth of Rs 480 billion in next three yeas, starting from the upcoming budget.
According to the Economic Survey 2013-2014, the cost of exemptions in respect of income taxes is worth of Rs 96.63 billion during the outgoing fiscal year. Meanwhile, the cost of sales tax exemption has been estimated to be Rs 249 billion during outgoing financial year, which was only 39 billion last year. Similarly, the cost of customs exemptions was projected at Rs 131.5 billion during outgoing fiscal year that was Rs 120 billion in previous year.
The break-up of estimated revenue loss in income tax expenditures revealed that one billion rupees revenue loss occurred due to exemption given to pensions and gratuity, Rs 11.1 billion on income from funds, board of education, universities and computer training institutions, Rs 2.5 billion on donations and contributions to charitable organisations, Rs 52.03 billion on independent power producers, Rs 1.91 billion on income from certain trust, welfare and charitable institutions non-profit organisations. Similarly, income tax exemption worth of Rs 4.1 billion has been given to the profits on debt/interest from government securities and certain foreign currency accounts etc, Rs 0.994 billion on export of information technology, Rs 5 billion on capital gains and Rs 18 billion on other sector and enterprise specific exemptions during the outgoing financial year.
According to survey, sales tax exemptions are provided at export facilitations schemes and general and sector specific SRO. According to the further details, tax exemption worth of Rs 65 billion was given due to concessionary rate of sales tax on raw materials, intermediary inputs and finished goods relating to textiles, carpets, leather, sports & surgical sectors). Similarly, the government has given concessions worth of Rs 94 billion on zero-rated on specified goods.
Meanwhile, Customs exemptions are mainly given on raw materials and components, plants, machinery and equipment imported by high-tech, priority and value added industries, imports for energy sector projects and exemptions to exploration and production companies. Some of these exemptions are due to international contractual obligations. The government has given Rs 131.45 billion Customs exemptions during the outgoing fiscal year.
Concession of Customs Duty on goods imported from SAARC and ECO countries cost Rs 290.3 million, exemption from Customs Duty on imports from Sri Lanka cost Rs 732.6 million, exemption from Customs Duty on imports into Pakistan from China cost Rs 31.46 billion, conditional exemption of Customs Duty on import of raw materials and components etc. for manufacture of certain goods (Survey based) cost Rs 32.52 billion and exemption from Customs Duty and Sales Tax on import of specified machinery, equipment, apparatus and item cost Rs 21.78 billion. –Imran Ali Kundi.