New Inland Revenue Act Passed in Parliament

New Inland Revenue Bill was passed in the parliament yesterday. Here is the summary of changes.

• 10% Tax on capital gains arising on investment assets has been reintroduced.
• Withholding tax scope is increased and service payments will be liable to WHT
• Qualifying payment relief on employment income of resident individuals has been increased to Rs. 700,000/- from Rs.250,000/-
• Employment income to be taxed under progressive rates up to 24% and individual income tax slabs are revised.
• Tax on Interest and dividends increased to 14% from 10%
• Capital allowance rates are revised
• Deemed dividend tax is removed
• Carry forward of losses are limited to 06 years.
• Dividend will include share repurchases and capital reductions.
• Resident companies are not entitled to claim credit on taxes withheld on interest income.
• Interest income after withholding tax will again be subject to tax.
• Notional tax credit on interest on government securities in the secondary market is removed
  New concept of “Permanent establishment” is introduced to determine the business income of a non-resident.
• Time bar for raising assessments is increased to 4 years, other than in the case of default assessments. The time for determining an appeal, by the Commissioner General is reduced to 3 months.

Download the Inland Revenue Bill