ISLAMABAD: As the government announced a modest tax relief for the lower income slabs, Finance Minister Muhammad Aurangzeb on Monday introduced three new tax measures in the National Assembly to offset its revenue impact part of the country`s ongoing commitment to remain within the fiscal parameters agreed with the International Monetary Fund (IMF).

In his winding-up speech, Mr Aurangzeb informed the National Assembly that the proposed measures aim to offset the revenue shortfall resulting from the tax relief, while ensuring that the industrial and commercial sectors are not subjected to additional burden.

As part of three new revenue measures, the government has proposed raising the tax rate on incomederived from the debt portion of dividends issued by mutual funds to companies from 25 per cent to 29pc. The revision aligns this category with the tax rate already applied to other corporate income streams.

A 20pc tax has been proposed on profits earned by corporations and companies through investments in government securities underscoring the government`s broader objective of expanding credit access for the private sector.

Additionally, a federal excise duty (FED) of Rs10 has been imposed on one-day-old chicks, aimed at ensuring the poultry industry contributes its due share tonationalrevenue.

Mr Aurangzeb stated that the government initially proposed reducing the tax rate from 5pc to 2.5pc for annual incomes between Rs600,000 and Rs1.2 million. However, following the prime minister`s directive, the rate was brought down to 1pc for this income bracket.

He also clarified a misperception stemming from his budget speech, where it was mistakenly inferred that the proposed tax on pensions would also apply to commutation and gratuity amounts.

He said that that would not be the case. It was also clarified that there would be no changes in the taxation of voluntary pension scheme.

The minister said that the tax will only apply to individuals receiving annual pensions exceeding Rs10 mil-lion, while pensioners above the age of 75 are entirely exempt from any form of taxation.

Mr Aurangzeb also informed the National Assembly that the amount of sales tax proposed on solar power equipment had now been reduced to 10pc.

However, he said, this tax will apply to only 46pc of imported components, resulting in a modest 4.6pc increase in the overall price of imported solar panels.

The government has proposed levying a sales tax on the import of raw cotton and yarn, in a bid to narrow the price disparity between imported and locally produced goods, while bolstering the domestic agriculture sector.