On 23 January 2019, Pakistan’s draft Finance Supplementary (Second Amendment) Bill, 2019 was submitted to the National Assembly. The finance minister clarified that, “This is not a budget, this is a corrective package aimed at addressing various sectors of the economy,”

The salient features of Finance Supplementary (Second Amendment) Bill of 2019:

  • The tax on dividend income would be abolished (5% of the whole profits applicable in cases where profit distribution does not exceed 20% of profits) after tax year 2019;
  • The tax on inter-corporate dividends in case of companies availing group relief would be reduced based on the percentage of shareholding the dividend recipient has in the distributing company;
  • The Super Tax on the non-banking sector would be abolished from tax year 2020, while the Super Tax would be applicable at the rate of 4% for banks until tax year 2021;
  • The advance income tax collected on imports by commercial importers would be made a final tax liability instead of being part of the minimum tax regime;
  • The frequency of monthly withholding statements would be reduced to a biannual statement filing;
  • An exemption would be granted for five years to industrial undertakings set up for manufacturing of equipment used in the generation of renewable energy if such undertaking is set up between 1 March 2019 and 30 June 2023; and
  • Capital losses from the disposal of shares in tax year 2019 and subsequent years may be carried forward for 3 years.