ISLAMABAD: The Reforms and Resource Mobilisation Commission (RRMC) on Saturday proposed a 1% tax on deemed rental income on land held by non-filers in the budget 2023-24.
The incumbent government’s commission has made some tax law changes to broaden the tax base. But has not made any major recommendations.
The interim report from the commission stated that only filers are paying the Section 7E tax on deemed rental income on land and property.
The report recommends that the government establish rules to clarify that non-filers pay 1% in urban and semi-urban areas and instruct land registration and transfer authorities to collect the tax on land transfers.
It should collected like the non-utilisation fee by various authorities or attached. If the value of such unpaid 1% tax under 7E on land held by non-filers exceeds Rs10 million.
International air travelers—filers and non-filers—pay the federal excise duty (FED). FED should replaced with advance income tax for non-filers only to encourage filing and penalise non-filers.
The FED should be 20% on air travel outside Pakistan, even in economy class. Only one Haj in the last five years is subject to FED.
The purchase of waste/used material should be exempt from income tax. As well as sales tax withholding for five years to encourage recycling and value addition and promote environmentally friendly business structures.
RRMC Meeting
Moreover, Federal Minister for Finance and Revenue Ishaq Dar chaired the RRMC meeting at the Finance Division on Saturday. The meeting was attended by MoS/Chairman RRMC Ashfaq Yousuf Tola, SAPM on Finance Tariq Bajwa. SAPM on Revenue Tariq Mehmood Pasha, secretary finance, FBR chairman, and other senior officers from Finance Division, FBR, and RRMC.
While, Dar welcomed the commission and discussed the country’s financial outlook. He said that despite challenges, the government will reform various sectors to stabilise and grow the economy.
The commission chairman gave the finance minister an interim report with recommendations. The minister praised the RRMC for identifying problems in the taxation system. As well as proposing revenue policy reforms for resource mobilisation. Ease of doing business, and taxpayer facilitation to achieve sustainable economic growth.
The meeting discussed the commission’s recommendations and agreed to create business-friendly tax reforms after consulting stakeholders.
The minister offered his full support to the commission to expedite reforms.
The commission chairman thanked the minister for his interest and support of comprehensive reforms.
