ISLAMABAD Playing its magic tricks as usual the Federal Board of Revenue has claimed of providing relief to the lower income groups, but through increasing the tax rates and withdrawal of tax exemptions on score of items, it has ensured that the people as a whole bleed more profusely to advantage of the government. Among the positive steps the government proposed Friday in its budget statement are reduction in the General Sales Tax (GST) rate by one per cent and enhancement of the minimum income tax level to Rs350,000 from earlier Rs300,000. The government took revenue generation measures of around Rs33 billion against the given relief of Rs 52.4 billion, therefore, the net impact of the overall taxation measures would translate into Rs21.1 billion loss to the tax department during the upcoming financial year. However, the Federal Board of Revenue (FBR) aims to collect more than Rs50 billion through administrative reforms in the different government departments, withdrawal of tax exemption on different items and increase tax rate on certain items. The government has proposed to withdraw sales tax exemptions on surgical tapes, ultrasound gel, diapers for patients, bricks and building blocks of cement, computer software, ambulance, fire fighting vehicles, waste disposal trucks, second hand lorries, aircrafts, ships of gross tonnage exceeding 15 LTDs, spare parts and equipment for aircraft, equipment and machinery for air navigation, bulldozers and combined harvesters, CNG kits, cylinders, valves, commercial catalogues, rock phosphates, phosphoric acid and mineral oil. Elimination of exemptions on these commodities would generate Rs7 billion. The government has also proposed to withdraw sales tax exemptions on defence stores and this move would fetch Rs10 billion in the next fiscal year. Meanwhile, the upward limit of duty slab to enhance federal excise duty on locally produced cigarettes would be revised and this would generate Rs9 billion. The value addition tax (VAT) levied on commercial importers is being enhanced from two to three per cent, which is levied and collected at import stage and FBR would generate Rs3 billion through this move. The sales tax on sugar at import and local supply stage has been withdrawn and FED at eight per cent is being imposed which would generate Rs1 billion. The government has proposed rationalising the zero-rate regime to limits its application only to selected sectors and this would give Rs1 billion. Similarly, the FED on filter rods for cigarettes has been rationalised from one rupee per filter rod to 20 per cent added-value and this would generate Rs200 million. The FED on un-manufactured tobacco is being enhanced from Rs5 per kg to Rs10 per kg. The government has proposed to eliminate Regulatory Duty on 392 items, however, it would be imposed on luxury vehicles, cigarettes, luxury tires and bathroom fittings. The major items on which the duty is being eliminated include dairy products, chocolates, processed fruits, cosmetics, air conditioners, refrigerators, deep freezers, LCD TV, vegetables, microwave ovens, prepared food and others. The government has proposed to decrease the rate of GST by one per cent and the minimum rate would be 16 per cent against the earlier rate of 17 per cent. This move would cause a loss of Rs35 billion to the FBR. Similarly, the government has proposed to enhance the minimum income tax level to Rs 350,000 from earlier Rs 300,000 for the welfare of individuals and this would cause Rs800 million loss to the FBR. However, the individual taxpayers whose normal income is between Rs 300,000 to Rs 350,000 shall be required to file return of income and statement for the purpose of documentation. Meanwhile, the rate of tax deductible on cash withdrawals from banks is suggested to reduce to 0.2 per cent from existing 0.3 per cent and this would result in loss of Rs3 billion to FBR. Similarly, the government has proposed to reduce the overall scope of federal excise duty and also completely eliminating the special excise duty to reduce the burden of multiple taxes and this would result in loss of Rs12 billion to the tax department. The FED on beverages is reduced from 12 to 6 per cent and this would lead to loss of Rs1.5 billion to the FBR. The government has also proposed to reduce the FED on cement by Rs300 metric tonnes for the coming year and Rs250 million each in next two years. In order to encourage companies enlistment on stock exchange, the existing tax credit equal to five per cent is proposed to be enhanced to 15 per cent. For encouraging investments made by non-residents in government securities, the withholding tax on profit on debt deductible at the rate of 10 per cent is proposed to be a final tax. Five per cent customs duty on pharmaceutical raw materials has been abolished to provide relief to common man.