Oct 18 , 2015
News
Dar discusses IT options for corporate service sectors
APPISLAMABAD: Finance Minister Senator Mohammad Ishaq Dar here on Saturday chaired a meeting to consider options regarding minimum income tax on various corporate service sectors.
Representatives of 12 such sectors were present in the meeting held at the Ministry of Finance, said a press release. It may be recalled had that the minister had constituted a committee to review taxation under Section 153(1)(b) of the Income Tax Ordinance 2001.
The five-member Committee was headed by Special Assistant to Prime Minister on Revenue, Haroon Akhtar Khan. The committee invited all the stakeholders, who had approached the Federal Board of Revenue (FBR) through their representatives to discuss the issue with the support financial data. Twelve corporate sectors had approached the FBR and presented their case for redressal of their grievances. Each sector was heard by the committee and financial data discussed. The gist of the representation of nearly all the aggrieved sectors was that they operate on very low margin of profit and 8% minimum tax cannot be absorbed by them.
The committee after having discussions with the representatives of the corporate service sectors, submitted its report to the Finance Minister. After examining the report and meeting the representatives of above-mentioned sectors, the Finance Minister decided that the 12 corporate service sectors, including freight forwarding services (sea), air cargo services (air freight), courier services, manpower outsourcing services, hotel services, security guard services, software services, tracking services, advertising services, share registrar services, engineering services and car rental services, shall have one of the following two mutually exclusive options:
(a) To opt out of minimum tax as referred to in clause-b of the sub-section 3 of section 153 of Income Tax Ordinance 2001 and present their accounts for audit by giving an irrevocable undertaking in writing by the date specified by the government for tax year 2016.
Provided that in such case, tax liability shall not be less than 2% of the gross turn over. Or, (b) To pay minimum tax @ 8% of the gross turnover and entitled to carry forward this minimum tax if it exceeds the actual tax payable after assessment.
However, the unadjusted amount of tax shall be carried forward and adjusted against tax liability of subsequent years up to a maximum of five years.
The representatives of the corporate service sectors agreed to the recommendation that the committee proposed. The Finance Minister assured the representatives that after completion of due codal formalities, requisite notifications shall be issued effective November 1, 2015. They thanked the Finance Minister for giving them a patient hearing to arrive at an amicable decision regarding minimum tax. They assured of their full support in the government’s resolve to promote tax culture and improve tax to GDP ratio of Pakistan. The SAPM on Revenue, Haroon Akhtar Khan, FBR Chairman and other senior officials of Ministry of Finance and FBR were also present in the meeting.
Courtesy www.dailytimes.com.pk