The government is set to bring a raft of changes in the tax measures for the upcoming fiscal, including the reduction in the age of importable re-conditioned cars to three years, increase in income taxes on brokerage houses to .010 per cent from .005 per cent and a blanket safeguard steps for local industries.
According to the existing import policy, the government allows import of used car’s above five years’ old. No change in the existing duty structure on new and reconditioned cars is likely.
The revenue board will keep a mandatory rule for submission of manufacturers’ price certificates on import of new cars to check duty evasion.
The changes in tax measures are likely to be proposed in the national budget to be placed before parliament today (Thursday).
The revenue board might also cut duty on machineries and raw materials of Liquefied Petroleum Gas (LPG), Effluent Treatment Plant (ETP), and reduce taxes for solar lantern and some essential life saving drugs.
Sources said the National Board of Revenue (NBR) will encourage use of LPG by providing tax-benefit on import and at local manufacturing stage.
They said tax waiver for import of major food items including rice, sugar, lentils, and onion is expected to remain unchanged while 10 per cent Value Added Tax (VAT) on edible oil will continue.
Customs duty on some of the basic industrial raw materials may be cut for the sake of local manufacturing industries. The revenue board will slap supplementary duty (SD) on energy drinks and raise taxes on chewing tobacco. Taxes on and price slabs of cigarettes are expected to be increased significantly, the highest in last ten years, in the budget.
The value of premium brand cigarettes might be increased by 28 per cent while that of low brand by 18 per cent. Businesses will get an ‘honour card’ after submission of 12 returns in a year. Penalty for evaders of VAT will be reduced to 1.5 per cent from 2.5 per cent of the evaded amount of tax.
There might be a limited scope to disclose undeclared income through investment in bonds. In the current fiscal, the government offered scope for investment of undisclosed money in infrastructure investment bond that is valid until 2012.
The revenue board also plans to introduce property tax and bring all government officials and dignitaries under tax net from 2011-12.