Minimum taxable income revised in budget

ISLAMABAD, June 11 (INP): The minimum taxable income was reviewed and set at Rs0.6 million and Rs0.4 million per annum for the salaried and non-salaried folks, respectively, State Minister for Revenue Hammad Azhar announced while presenting the Federal Budget 2019-20.

In this regard, 11 taxable slabs at progressive tax rates from 5 percent to 35 percent were introduced in federal budget 2019-20 for salaried people with income of more than Rs0.6 million per annum.

Further, eight taxable slabs at tax rates from 5 percent to 35 percent were introduced in Federal Budget 2019-20 for non-salaried people with income of more than Rs0.4 million per annum.

Azhar explained that the Finance Act 2018 had earlier significantly relaxed the minimum taxable income for both the salaried and non-salaried classes — revising it upwards from Rs0.4 million to Rs1.2 million. This, he said, had led to a major decrease in the receivables by Rs80 billion.

It is noteworthy that the minimum taxable income is usually based on the per capita income and examples of such leniency are not common, he noted.

Separately, non-filers were no more restricted from purchasing property and can buy estate of over Rs5 million, he mentioned.

The corporate tax has now been fixed at 29 percent for two years, the minister announced.

This has been done in light of the country’s current economic conditions as well as success in bringing it down from 35 percent to 29 percent over the period from fiscal year 2014 through 2018, he said.

Azhar went on to say that prior to Finance Act 2014, the corporate tax rate was 35 percent. This, however, was brought down each year by one percent, bringing it effectively to 30 percent.

In accordance with the prior proposal, it was to be decreased from 30 percent in 2018 to 25 percent in 2023.