Govt abolishes super tax for SMEs with annual income up to Rs500m

Minister of State for Finance, Revenue and Railways Bilal Azhar Kayani said on Saturday the federal government has abolished super tax for exporters and small and medium-sized enterprises (SMEs) with annual income between Rs150 million and Rs500 million. Kayani said the move is aimed at reducing the tax burden on the business community. The government has also reduced the tax rate at the proceeds stage from 2.25 per cent to 1.25 per cent. Exporters have been exempted from super tax, while the rate for businesses earning more than Rs500 million has been cut from 10 per cent to 8 per cent. The export development surcharge has also been abolished, while the chairmanship of the Export Development Fund has been handed to the private sector. Kayani said the government wanted to work with the business community and resolve its problems. He said Prime Minister Shehbaz Sharif had formed working groups before the budget to address business-related issues. He said the private sector had an important role in tax collection, employment and business growth, adding that its proposals were included in the budget. PM reviews FBR overhaul Kayani said the prime minister held a weekly review of the Federal Board of Revenue (FBR) and was seeking to upgrade and restructure the tax authority. He said audits would now be conducted under a central system. The government is also bringing a new tax format for shopkeepers. Kayani said the scheme was meant for small shopkeepers and was open to both filers and non-filers. Under the scheme, shopkeepers would pay withholding tax, with Rs25,000 payable in all cases. Those joining the scheme and paying tax would not face an audit unless they provided false information. Kayani said audits would be conducted in consultation with traders' organisations where necessary. He added that those who joined the scheme and paid tax would receive government support. He said shopkeepers with annual income of up to Rs200 million could join the tax scheme. The minister said the tax burden on salaried people had also been reduced this year. He said cutting tax rates while remaining in the International Monetary Fund (IMF) programme was not easy, but the prime minister had clearly directed that maximum relief be given to the salaried class. Kayani said the Lahore Chamber of Commerce and Industry was important to the national economy and close to the prime minister. He said its proposals were important for policy-making and that giving the private sector a central role in policy-making was the prime minister's vision.