The finance the ministry has launched the Fiscal Incentives for the years 2016 to 2020 as part of the government’s recently launched economic development policy.
The fiscal incentives have been categorised as Direct Tax Incentives and Indirect Tax Incentives in both general and sector-specific incentives. Some of the incentives offered under the Fiscal Incentive 2016 include tax holiday, reinvestment allowance, income exemption, Tax Deducted at Source exemption and Sales Tax and Customs Duty exemptions.
Performance based incentives in the form of tax rebates, tax holiday, sales tax and customs duty exemptions are also offered in the Fiscal Incentive, 2016.
The newly launched fiscal Incentives will supersede the previous incentives and come into force from 1st January 2016, unless specified otherwise.
The Fiscal Incentive 2016 mostly restates similar clauses mentioned in the Fiscal Incentive 2010 with few alterations in the duration of tax breaks. New provisions featured are separate inclusion of mining and energy sector, under specific incentives, to promote energy efficient sectors and investment in research and development.
It also aims to create conducive environment for doing business by providing a transparent and suitable tax regime.