NBR for including proposals in Finance Bill \\\'15

The National Board of Revenue (NBR) has found a set of proposals in the PPP incentive package, including tax waiver, beyond the bounds of fiscal law, and proposed their incorporation in the Finance Bill 2015.
According to NBR, allowing relief on capital-gain tax on transfer of shares by the infrastructure-building companies is a major bounty beyond the provision.
Tax on capital gain on transfer of shares is currently 15 per cent for the companies in the Income Tax Ordinance 1984.
The draft PPP (public-private partnership) incentive package - coming from high quarters - has proposed the tax exemption, as similar types of projects, implemented by the government do not have any capital gain.
Deep-seaport, elevated expressway, export processing zone (EPZ), flyover, gas pipeline, hi-tech park, information and communications technology (ICT) village or software technology zone, IT park, large water-treatment plant and supply pipelines, liquefied natural gas (LNG) terminal and transmission line, underground rail-bridge, sea- or river-port, rapid transit, economic zone (EZ), industrial estate and such other relevant physical infrastructure-building companies may be allowed to get tax benefit on their capital gain from transfer of shares.
"Rationalisation of capital-gain tax from 15 per cent needs inclusion in the Finance Bill 2015 with the approval of finance minister," the NBR proposal said. The revenue board made these opinions on the draft tax-incentive package for the PPP projects, recommended by PPP Office under the Prime Minister's Office (PMO).
PMO has recommended an incentive package, offering 11 types of income tax, customs duty and value-added tax-related benefits for the projects to be taken up under PPP scheme, to minimise tax burden on the investors.  
Last week, NBR forwarded its opinions on the draft package to PMO after getting approval from Finance Minister Abul Maal Abdul Muhith.
Three wings of the NBR - customs, income tax and VAT - gave their observations and opinions after scrutinising each of the proposals.
In the income tax law, there is tax holiday provision for 15 years for the investors in coal-based private power projects that will sign contracts with the government by June 30, 2020.
The draft PPP package offered tax breaks for up to 10 years of commercial production or 50 per cent time of the contract period, whichever is higher, for physical infrastructure-building companies.  
In this context, the NBR proposal said the tax authority offers tax facility at gradually reduced rates in phases, to the infrastructure-builders.
The income tax wing said land reclamation, dredging rivers, canals, wetlands, lakes and other related facilities, economic zones, and industrial estates can be offered tax relief at reduced rates by including the sectors under Section 46C of the Income Tax Ordinance 1984.
On the other hand, the PPP package incorporates 'full exemption of customs duties, import-permit fees and other surcharges on raw materials, capital machinery and spare-parts to be used in all PPP projects'.
Besides, cement, rod, pre-fabricated building, electric cable, transformer have local production. "Such products do not need incentives on import," said the customs wing.
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