ISLAMABAD: The federal government is likely to abolish the 0.25% tax imposed on IT services in order to promote exports of IT and IT-related services in the federal budget for the next fiscal year 2023-24.
Apart from this, other proposals including the restoration of sections sixty-two and sixty-four of the Income Tax Ordinance and allowing tax credit on house loans are under consideration to provide relief to salaried employees and salaried individual taxpayers.
In this regard, a senior officer of the Federal Board of Revenue told that the Federal Board of Revenue is reviewing the proposals for the federal budget of the next fiscal year to finalize them.
Sources say that under Section 149 of the Income Tax Ordinance, withholding tax is deducted on the estimated salary of salaried employees at the average tax rate, resulting in more tax deductions from the salaries of most employees and in their tax returns. Refund claims are made due to over-taxation.
The government has started reviewing proposals to restore Sections 62 and 64 in the next fiscal year’s federal budget, which will benefit salaried employees.
Apart from this, the proposal to restore Section 62A is also under consideration, which will enable the facility of tax credits on house loans.
Similarly, the proposal to allow tax adjustment for salaried employees on Zakat and other deductible allowances including profit under Section Sixty, Section Sixty C is under consideration.
In the federal budget of the next financial year, the proposal to abolish the 0.25% tax imposed under Section 154 of the Income Tax Ordinance is also under consideration to promote the export of IT and IT-related services.
Sources say that giving tax exemption to the IT sector will help in earning huge foreign exchange.
