It has been proposed to reduce the tax rate by up to 2.5% if all financial transactions of companies are done through banks. The proposed new system is changing the tax structure for both listed and unlisted companies.
According to the proposal, the existing tax rate of 22.5% will be reduced to 20% for companies with at least 10% shares listed in the capital market.
On the other hand, the tax rate of unlisted companies has been reduced from 27.5% to 25%—the condition is that all transactions of the concerned company must be done through banking channels.
In addition, to encourage card-based transactions, it has been proposed to reduce the duty on the import of point of sales (POS) machines from 10% to 5%.
At the same time, it has been recommended to completely withdraw the existing 7.5% advance tax.
As part of expanding the cashless economy, initiatives are being taken to increase the use of POS machines in village-level shops.
In addition, the budget proposal also includes a system to allow small and retail traders to pay VAT from home through banking or mobile financial services.