Govt to impose 10pc tax on expensive air tickets

ISLAMABAD: The government has decided to impose 10 percent withholding tax on first class and business class international travelers in the budget 2014-15, The News has learnt.

In another major revenue spinning measure, the government is all set to enhance tax rates on services of professionals including doctors, lawyers, chartered accountants, architects, dentists, interior decorators and many others from existing 6 to 10 pc.

However, Prime Minister Nawaz Sharif on Thursday directed the FBR authorities not to increase the tax burden on the common citizens and on kitchen items such as vegetables, ghee, cooking oil, medicines.

“Prime Minister Nawaz Sharif has convened another crucial meeting on Friday to take decisions on withdrawal of hundreds of Statutory Regulatory Orders (SROs) as well as transferring SRO issuance powers to Parliament,” official sources in Finance Division confirmed to The News here on Thursday.

According to finalised budgetary measures, the government has decided to tap expenditures side of potential tax evaders in the coming budget as 10% withholding tax in adjustable mode is proposed to be levied on non- filers international travelers and 5 percent on registered travelers who travel in first class and business class of airlines.

“There will be no withholding tax on economy class of international travelers,” said the sources.

According to the working done to justify imposition of 10 percent withholding tax in adjustable mode on wealthy people who can afford to travel in first class or business class, the sale of total airline tickets for purpose of international traveling of wealthy class consumed Rs60 billion per annum. There is fixed Federal Excise Duty (FED) imposed on air traveling for both domestic and international travelers.

Currently, there is 5 percent Withholding Tax (WHT) imposed on domestic travelers and now the government would be moving towards slapping this tax on international travelers. “We expect that the FBR will generate around Rs6 billion through this tax measure in the next fiscal year,” said the official sources.

The government, the sources said, intended to move ahead to increase the tax burden on those who are unwilling to come into tax net.

Another proposal so far finalised by the government for upcoming budget is to increase rate of withholding tax on professionals such as doctors, lawyers, chartered accountants and many others.

The services under section 153(1) (b) of the Income Tax Ordinance 2001 attract tax deduction of 6 percent. The said rate is to be enhanced to 10 percent in the coming budget. Under section 153, the services include the services of accountants, architects, dentists, doctors, engineers, interior decorators and lawyers, otherwise than as an employee.

US ready to impose sanctions on Russia, Obama warns Putin

In this March 6, 2014, photo, President Barack Obama talks about the situation in Ukraine, in the briefing room of the White House in Washington.

President Barack Obama told Russian President Vladimir Putin on Sunday the United States rejected the results of a secession referendum in Ukraine’s Crimea region and warned that Washington was ready to impose sanctions on Moscow over the crisis.
With Washington and its European allies expected to slap “targeted” punitive measures on Russian officials as early as Monday, the White House said Obama made clear to Putin that the dispute could still be resolved diplomatically but that Russia first must halt military incursions into Ukrainian territory.
Confirming what was considered a foregone conclusion in Sunday’s hastily called referendum in Crimea, a region with a Russian-speaking majority, regional authorities said that with over half the vote counted 95.5 percent had chosen the option of annexation of the strategic peninsula by Moscow.
The regional government in Crimea, now controlled by Russian forces, went ahead with the ballot despite fierce US and European opposition, underscoring the West’s limited leverage in the worst standoff of its kind since the end of the Cold War.
“He (Obama) emphasized that Russia’s actions were in violation of Ukraine’s sovereignty and territorial integrity and that, in coordination with our European partners, we are prepared to impose additional costs on Russia for its actions,” the White House said in a summary of Obama’s telephone call with Putin.
Obama suggested to Putin that the referendum was a sham carried out “under duress of Russian military intervention” and Washington and the international community would never accept the results, the White House said.
According to the Kremlin, Putin told Obama the referendum on union with Russia was legitimate the two leaders agreed on the need to cooperate to stabilize Ukraine. The readouts of the call from both capitals spoke of the need to deploy international monitors to Ukraine.
Amid accusations from Republican critics that Obama had not shown enough resolve against Putin, the US administration appeared intent on proving it was not bluffing over its threat of consequences for the seizure of Crimea.
US options to prevent Russian from formally absorbing the strategic region are few. But some officials in Washington are hopeful that instead of pressing ahead with such a provocative action, Putin may hold off for now, seeking to avoid further escalation of the crisis.
White House senior adviser Dan Pfeiffer said the administration would step up pressure on Russia. “You can expect sanctions designations in the coming days,” Pfeiffer told NBC’s “Meet the Press,” as the administration prepared to identify Russians whom the United States will seek to punish with visa bans and asset freezes the president authorized earlier this month.