LAHORE: Addition of a new Fifteenth Schedule to the Income Tax Ordinance in the Finance Bill has impacted a number of taxable activities, said sources.
They said the application for booking, purchase or registration of vehicle under Section 114(1) (a), the threshold motor limitation has been fixed at more than PKR 7 million. The transaction value shall be the invoice value for locally manufactured vehicles, or the import value assessed by customs including all taxes, duties, levies and charges.
According to the sources, cars up to PKR 7 million can be purchased by persons, including non-filers, without obtaining a certificate of eligibility for such purchase. This may potentially increase the demand for used cars, and adversely affect the market for brand new cars.
So far as registering recording or attesting transfer of any immoveable property under Section restriction 114(1)(b) is concerned, the threshold limitation has been fixed at more than PKR 100 million for commercial immoveable properties and more than PKR 50 million for residential immoveable properties. The transaction value taken shall be the fair market value as defined under Section 2(22AA) of the ITO.
Regarding investment in securities, debt securities, units of mutual funds or money market instruments under Section restriction 114(1)(c), the threshold limitation has been fixed at more than PKR 50 million. The transaction value shall be the acquisition cost of securities or debt securities or unit of mutual funds or money market instruments. This will only apply where the investment amount up to PKR 50 million shall be new investment in any financial year excluding reinvestment either by liquidation or similar type of securities and / or reinvestment of returns earned on already held securities.
Regarding opening or maintaining of bank account under Section restriction 114C(1)(d)(i), the restriction has only been placed on opening or maintaining of bank accounts except savings accounts. For annual cash withdrawal limit under Section restriction 114C(1)(d)(ii), the threshold has been fixed for equal to or more than PKR 100 million in all bank accounts held by an individual.
According to the sources, the thresholds fixed seem to be arbitrary in nature, and will exclude majority of the ineligible persons that the government should have sought to bring within the tax net.
Overall, they added, this provision will do only little to broaden the tax net, and will only add a bureaucratic hurdle for wealthy people to obtain eligibility certificates for specific transactions. They said this section is also against the self-assessment scheme of the ITO, and may be subject to litigation on this ground.
Copyright Business Recorder, 2025
