Government revenue by way of income tax and duties increased by 66 percent for the period January to May 2007 compared to the corresponding period last year the Mid Year Fiscal Position Report of the Finance and Planning Ministry released last Friday said.
According to the report, the Corporate Profit Tax, Personal Income Tax, Tax on Interest Income and Economic Service Charge brought in 41.1 billion rupees.
A series of policy measures implemented to broaden the tax base, rate revisions and administrative improvement during recent years coupled with the dedication of the tax administration contributed to the growth in revenue, the report said.
Several further measures were introduced in the 2007 Budget proposals that came to effect from April 1 in the current year to reach the revenue target of around 3.5 per cent of the GDP with the measures introduced to broaden the tax base, the report noted.
Under the new income tax rules profits of income of insurance companies will be considered separately for life and general insurance and any loss from one business of insurance can be set off only against the profits of that insurance business.
Companies that do not distribute dividends of less than 25 percent of its distributable profits will be required to pay an additional 15 percent of the excess of distributable profits but the 15 percent rate will not apply to a company if it is the holding company of any group of companies.
However the Economic Service Charge has been reduced from 10 million to 7.5 million per quarter, the report.