Highlights of Finance Bill and Finance Act 2014

July 26, 2014 | By More

Simplification of Income Tax Law where different exemptions and concessions were part of Second Schedule, are now being included in the rate schedule (the first schedule) and few are being incorporated in the relevant sections to make the law more understandable for a common reader. The corporate tax rate is to be reduced by one per cent to 33% for tax year 2015. Last year it was reduced from 35% to 34% for the TY2014.

The existing rates Withholding Tax on services at 6% and 7% for corporate and non-corporate taxpayers respectively, are to be enhanced to 8% in corporate cases and 10% in other cases. The existing rates Withholding Tax on Supplies at 3.5% and 4% for corporate and non-corporate taxpayers respectively, are to be enhanced to 4% in corporate cases and 4.5% in other cases. The existing rates of Withholding Tax on Contracts at 6% and 6.5% for corporate and non-corporate taxpayers respectively, are to be enhanced to 7% in corporate cases and 7.5% in other cases.

Rate of tax withheld on mobile phone charges is being reduced from 15% to 14%. Last year it was increased from 10% to 15%. Advance income tax on functions and gatherings being reduced from 10% to 5%.

Commission agents are taxed under Final Tax regime at the rate of 10% on commission paid. For advertising agents, the rate of tax is 5% which is being increased to 10% as well. 05 years tax exemptions for persons setting up processing plants for locally grown fruits in Baluchistan Province, Malakand Division, Gilgit-Baltistan and FATA to reach the bigger markets and to promote investment, growth and employment in these areas.

Download more highlights of Finance Bill 2014 and Finance Act 2014.

 

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Category: Taxation and Budget

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