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Sunday, September 24, 2023

Traders’ concerns about the Finance Act 2022

Post-budget session to review a new concept of "deemed rental income" on immovable properties

On Wednesday, traders raised serious concerns about the execution of important budgetary measures, which go into effect on July 1, 2022, including the notion of “deemed rental income” on immovable properties.

The rate of the proposed tax on deemed rental income would be 20 percent under the Finance Bill, 2022. The proposed tax on deemed income from an unutilized property above Rs25 million would not be applicable on the self-owned agricultural land where agriculture activity is carried out.

Traders requested considerable amendments to the Finance Act 2022 during a post-budget session with Finance Minister Miftah Ismail, to review a new concept of “deemed rental income” on immovable properties and a revision of the import restriction list.

Ismail held a meeting with a delegation of businessmen led by Muhammad Shakeel Munir, President Islamabad Chamber of Commerce and Industry (ICCI) and Chaudhary Naeem Rauf, President Rawalpindi Chamber of Commerce, and Industry (RCCI) at the Finance Division.

At the Finance Division, meeting was arranged with a delegation of businessmen led by Muhammad Shakeel Munir, President of the Islamabad Chamber of Commerce and Industry (ICCI), and Chaudhary Naeem Rauf, President of the Rawalpindi Chamber of Commerce, and Industry (RCCI).

Members of the business community thanked the finance minister for meeting and informing them about a variety of taxation related concerns in the federal budget for 2022-23. They asked for the government’s assistance in resolving their problems and increasing efficiency in many sectors.

Ismail welcomed the businessmen and acknowledged the business community’s contribution to the country’s economic prosperity. He also emphasized that macroeconomic stability was the current government’s top concern, and that the current government was working on maintaining financial discipline through effective and business-friendly policies in order to attain the economic growth level.

Eventually, the finance minister reaffirmed the current government’s determination to promote business operations and assist the business community in achieving sustainable growth in the country.

During the meeting, issues concerning importers and exporters, the amendment of the list of restricted imports, deemed rental income, poultry feed, furniture, tax concerns, sales tax, and duties were discussed.

Read more: Heavy financial losses as import ban causes congestion at ports

Miftah Ismail assured the Rawalpindi Chamber delegation that the Cabinet will consider granting a one-time exemption for bill of lading (BL) commodities that are restricted from import. Also, he informed the delegation that the problem will be remedied in conjunction with stakeholders in order to satisfy their concerns about deemed rental income.

The construction sector has been impacted, according to Chamber President Rauf, by the budget’s introduction of a tax on deemed rental revenue. He stated that industrial zones and special economic zones should be established in Rawalpindi as part of CPEC.  The list of items restricted for import should be revised as it is likely to increase smuggling, he added.

He stated that it was a positive step that the head of the FBR was present at the meeting and listened to our tax demands in detail and took suggestions. It is vital to provide assistance to the business community in order to deal with the current economic challenges. He also advised that the government should introduce sector-based incentive packages and develop policy in conjunction with stakeholders.