Latest news with #EighteenthAmendment
Business Recorder
3 days ago
- Business
- Business Recorder
Rental commercial property: Question arises on legality of taxation by Punjab govt
ISLAMABAD: A question has been raised on the legality of taxation of rental commercial property by the provincial government of Punjab in cases where the same income is already taxed at the federal level, reflecting double taxation. A review of Punjab Sales Tax on Commercial Property by Muhammad Asif Asgher Attorney-at-Law, former Chief Commissioner Inland Revenue/ former Member, Appellate Tribunal Inland Revenue (ATIR) revealed that Punjab's move to tax commercial rentals reflects the broader post-Eighteenth Amendment trend of provincial revenue expansion. However, the constitutional boundaries of such powers- especially where the same income stream is already federally taxed- remains unsettled. The eventual judicial outcome will determine whether this revenue measure becomes a permanent fixture or another short-lived experiment. Muhammad Asif Asgher stated that the Eighteenth Amendment to the Constitution of Pakistan, 1973 brought sweeping changes, the most significant being the omission of the Concurrent Legislative List from the Fourth Schedule. Prior to the amendment, the Federal Legislative List (FLL) contained subjects under exclusive federal competence (Article 142), while the Concurrent List allowed both the Federation and Provinces to legislate. With the deletion of the Concurrent List, legislative power over its subjects was devolved to the provinces. In addition, certain subjects were removed from the FLL itself. Notably, Clause 49 was amended to read: 'Taxes on the sale and purchase of goods imported, exported, produced, manufactured and consumed (except sales tax on services).' This seemingly small bracketed phrase empowered provinces to levy sales tax on services, creating a significant new revenue stream. Tax expert said that following the Eighteenth Amendment, provinces quickly established their own frameworks for taxing services. Punjab enacted the Punjab Sales Tax on Services Act, 2012, and Sindh passed the Sindh Sales Tax on Services Act, 2011. A key drafting challenge was defining 'services' broadly enough to capture emerging transactions. Section 2(38) of the Punjab Act states: 'Service' or 'services' means anything which is not goods or the providing of which is not a supply of goods, and shall include but not be limited to the services listed in the First [or Second] Schedule. This open-ended definition- whether borrowed from India's GST or developed locally — ensured that almost any activity outside the definition of 'goods' could be taxed. Traditionally, a 'service' involves the application of human effort or skill for another's benefit. However, Sindh was first to extend this to letting out of immovable property, reasoning that it did not involve the supply of goods. Amendments were made to include this within the definition of 'service,' and the Sindh Revenue Board began issuing tax notices to landlords. The Sindh High Court, in 2019 PTD 389, faced constitutional and interpretive challenges to taxing immovable property rentals. Rather than directly ruling whether such letting constituted a 'service,' the Court focused on Section 4 (1) (b) of the Sindh Act, which referred only to 'movable property' in defining 'economic activity.' The Court inferred that immovable property was excluded. The Supreme Court, in 2023 PTCL 96, dismissed the Sindh Government's appeal with a single-line observation: 'The mere renting out of property by a landlord to a tenant is not taxable as it is not a taxable service.' Notably, the Court gave no reasoning, leaving the constitutional question open and arguably outside the binding scope of Article 189. Former Member Appellate Tribunal stated both Sindh and Punjab amended their laws to explicitly include immovable property in 'economic activity.' Punjab's change came via the Finance Act, 2018 (effective 1 November 2018). However, Punjab delayed taxing such rentals until Finance Act, 2025, which revised the First Schedule: (i); Exempt: dwellings rented for non-commercial use. (ii); Taxable: dwellings and other immovable property rented for commercial use. The Punjab Revenue Authority has since begun issuing notices to landlords for registration and tax payment. Landlords argued they are already paying income tax on rental income and that this dual taxation is impermissible. One possible ground, relying on 2017 PTD 1 (Pakistan International Freight Forwarders), is that post-Eighteenth Amendment there is no concurrent taxing power: a single taxable event cannot be subject to both federal and provincial levies. Another round of constitutional litigation appears inevitable, Muhammad Asif Asgher added. Copyright Business Recorder, 2025
Yahoo
13-03-2025
- Business
- Yahoo
Trump Unleashes Chaos on Europe With Sky High Tariffs
Reciprocal tariffs from other countries seem to have taken the president by surprise. Donald Trump announced yet another round of tariffs against the European Union early Thursday, claiming that the 'hostile' coalition of countries—who have been allies with the U.S. for decades—would face severe consequences for levying U.S. whiskey imports. 'The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50 percent Tariff on Whisky,' Trump posted to Truth Social. 'If this Tariff is not removed immediately, the U.S. will shortly place a 200 percent Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.' The EU swiftly hit back Wednesday after Trump raised tariffs on aluminum and steel imports, announcing their own tolls on some of their biggest U.S. imports. That includes American beef, poultry, peanut butter, jeans, motorcycles, and alcohol, the last of which has become collateral damage in Trump's international trade war. 'The EU is a major destination for U.S. whiskey, with exports surging 60% in the past three years after an earlier set of tariffs was suspended,' reported the Associated Press. The president's new tariffs are expected to cost companies billions of dollars. Corporations will either have to eat the losses or—as is more likely—pass the higher costs off to their customers. 'We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers,' European Commission President Ursula von der Leyen said in a statement Wednesday, noting that the levies will cost jobs and only serve to increase the cost of goods both in the U.S. and abroad. But Trump's influence in hiking the cost of alcohol likely won't bode well for the country, if U.S. history serves as any lesson. While Trump's efforts aren't exactly stripping alcohol from the shelves, they will make the prices of liquor, wine, and beer skyrocket. That could make bottles less accessible for the average American and ultimately shrink consumption. The passage of the Eighteenth Amendment, which criminalized alcohol and sparked Prohibition, was not just wildly unpopular with the American public, but also had dire consequences for the U.S. economy. Government tax revenues, which up until that point relied heavily on liquor sales to substantiate their budgets, plummeted. The lack of alcohol sales between 1920 and 1933 cost the federal government $11 billion in lost tax revenue. In 2023, alcohol excise tax collections for the federal government totaled $11.1 billion, according to a report by the Congressional Research Service.
Yahoo
02-03-2025
- Politics
- Yahoo
Why Did The US Raise The Legal Drinking Age To 21?
18 is the legal drinking age in most countries and it was the minimum age in most U.S. states until the 1980s. Yes, people under 21 could legally buy alcohol before President Reagan signed a law to raise the legal age for alcohol consumption. So, what made the country change its mind? Before we get to the '80s, let's go back to the 1920s, when decades of anti-alcohol activism resulted in the Eighteenth Amendment banning the substance; ushering in Prohibition. Since the ban didn't stop people from drinking and gave rise to organized crime, President Franklin D. Roosevelt repealed the amendment in 1933. At this time, each state could decide the minimum drinking age, and most set it at 21, which was also the legal voting age. That's where it stayed until 1971, when the 26th Amendment made 18 the voting age. Because it didn't seem to make sense to trust people to elect a president but not to buy alcohol, all but 14 states lowered the drinking age to either 18, 19, or 20. But, as always, people have to ruin everything. Irresponsible drinking led to social issues, accidents, and even fatalities. Studies that compared teenage car accidents between states with different laws found that they were higher in places with lower drinking ages. Activists once again started to campaign and Congress passed the National Minimum Legal Drinking Age Act in 1984, incentivizing every state to raise the age back to 21. Read more: 14 Cheap But Delicious Beers You'll Wish You Tried Sooner Though it's been over 40 years, the National Minimum Drinking Age Act continues to be widely debated. Supporters point to data which suggests the law has reduced teenage drinking and drunk driving accidents. Critics point out the discrepancy of allowing people to vote, smoke, and serve in the military, but not drink. Some also argue that having a high minimum age increases the risk for dangerous drinking behaviors on college campuses. The debate on regulating alcohol can also be seen at the state level. Although every state now abides by the minimum drinking age of 21, they differ in what is seen as acceptable consumption. While some states are taking away old bans and allowing to-go cocktails, others are cracking down on happy hours and hard seltzers. It seems that the country can't quite yet agree on what it thinks about alcohol. Young Americans who feel lonely in the wait for their first legal drink can take heart in the fact they're not alone. There are several other countries (like Egypt, Indonesia, and United Arab Emirates) whose minimum drinking age is also 21. They can also be happy that they're not in Eritrea, where the age is set at 25, or in one of the seven countries where alcohol is completely illegal. For more food and drink goodness, join The Takeout's newsletter. Get taste tests, food & drink news, deals from your favorite chains, recipes, cooking tips, and more! Read the original article on The Takeout.
