ISLAMABAD: As per the demands of the International Monetary Fund (IMF), the tax rates on the registration of vehicles above 2,000cc as well as the higher income brackets of the salaried and non-salaried classes have been increased. . .
A day before Budget 2023-24, there was no increase in tax rates for vehicle registration and higher income brackets for salaried and non-salaried classes. But to revive the IMF program, the government had to take additional tax measures to bring more than Rs 215 billion into the national treasury.
So all avenues were explored where rates could be identified to bring in additional revenue, but the government did not bother to identify those who were already outside the tax net.
According to the Amending Finance Bill 2023-24 passed by Parliament on Sunday, the government has imposed a fixed tax on imported and locally manufactured vehicles from 2,001cc to 3,000cc and above.
The fixed rate of tax will be 6% of the value of a vehicle with an engine capacity of 2,001cc to 2,500cc. The fixed rate of tax will be 8% of the value of a vehicle with an engine capacity of 2,501cc to 3,000cc.
The prescribed rate of tax will be 10% of the value of a vehicle with an engine capacity of more than 3,000cc. The Finance Bill 2023-24 also approved an increase in tax rates in the higher income brackets of the salaried and non-salaried classes in the budget.
There is no change in the tax rate for salaried persons whose taxable income exceeds Rs 1,200,000 but does not exceed Rs 2,400,000. The tax rate will be 12.5% of the amount above Rs.15,000 + Rs.1,200,000.
Where the taxable income exceeds Rs 2,400,000 but does not exceed Rs 3,600,000, the rate of tax shall be Rs 165,000 + 22.5% of the amount exceeding Rs 2,400,000.
Where the taxable income exceeds Rs.3,600,000 but does not exceed Rs.6,000,000, the rate of tax shall be Rs.405,000 + 27.5% of the amount exceeding Rs.3,600,000.
Where the taxable income exceeds Rs.6,000,000, the rate of tax shall be Rs.1,095,000 plus 35% of the amount exceeding Rs.6,000,000.
The Amended Finance Bill 2023 has also increased the income tax on income of individuals and organizations of persons (AOPs) other than salaried individual.
The revised slab for individuals/AOPs revealed that where the taxable income exceeds Rs.600,000 but does not exceed Rs.800,000, the tax rate will be 7.5% of the amount exceeding Rs.600,000.
Where the taxable income exceeds Rs 800,000 but does not exceed Rs 1,200,000, the tax rate will be Rs 15,000 + 15% of the amount exceeding Rs 800,000.
Where the taxable income exceeds Rs.1,200,000 but does not exceed Rs.2,400,000, the rate of tax shall be Rs.75,000 + 20% of the amount exceeding Rs.1,200,000.
Where the taxable income exceeds Rs.2,400,000 but does not exceed Rs.3,000,000, the rate of tax shall be Rs.315,000 plus 25% of the amount exceeding Rs.2,400,000.
Under the new slab, where the taxable income exceeds Rs.3,000,000 but does not exceed Rs.4,000,000, the tax rate will be Rs.465,000 + 30% of the amount exceeding Rs.3,000,000.
Where the taxable income exceeds Rs.4,000,000, the rate of tax shall be Rs.765,000 plus 35% of the amount exceeding Rs.4,000,000.
