omc: no mention; hence safe - BMA Capital Management

15
KEY MEASURES
Income tax
June 7, 2010
� The long awaited capital gain tax has finally been imposed on securities
wherein long term investment prospects have been incentivised by lower
tax rates.
� Government has increased income tax rate for small companies form
existing 20% to 25%. We expect this to be a measure taken to gradually
bridge the income tax rate gap between small companies and corporates.
In addition, 5% tax credit for enlistment of companies has been announced
for the year of enlistment.
� Non taxable income has been increased from PKR100,000 and
PKR200,000 to PKR300,000 to incentivise the lower income non salaried
and salaried class. However, tweaking the upper slabs for the salaried class
will help offset the revenue impact for the same.
� To discourage loss adjustment and tax frauds, the government has
increased the minimum tax rate for loss making entities from 0.5% to 1.0%.
� Incentives for investment through 10% tax credit for BMR in the year of
incurrence
� For the rehabilitation of war affected areas the government has taken
multiple steps to promote commercial and industrial activities in the
northern areas.
� 10% Withholding tax on debt instruments (including govt. securities) is
proposed to be treated as final tax
Sales Tax and Federal Excise Duty
� Sales Tax (GST) rate has been increased form 16% to 17%
� Adjustment of FED paid on beverage concentrate allowed
� Increased FED on Natural Gas from PKR5.09/mmbtu to PKR10/mmbtu
� FED of PKR1.0 per filter rod of cigarettes
� 10% FED on electricity intensive home appliances
Custom Duty
� Reduced custom duty on crude palm oil from PKR9,000/MT to
PKR8,000MT to lower the cost of vegetable ghee and oil
� Reduction of duty to 5% on pharmaceutical raw materials
� Exemption of custom duty on import of raw material for energy saving
lamps to support the local manufacturers
� Exemption of CD and S.tax on rice processing machinery