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FBR extends period of reduced rate of minimum tax till June 2021

FBR extends period of reduced rate of minimum tax till June 2021

ISLAMABAD: Federal Board of Revenue (FBR) has extended the period of reduced rate of minimum tax for large trading houses up to June 30, 2021, it is learnt here.

Official sources told Customs Today that companies operating trading houses which simultaneously fulfill the conditions of having paid up capital exceeding Rs250 million, owning fixed assets exceeding Rs300 million at the close of the tax year, maintaining computerized records of imports and sale of goods, having a system of issuance of 100% cash receipts on sales, presenting their accounts for audit every year and being registered under the Sales Tax Act,1990 are entitled to avail a reduced rate of minimum tax at rate of 0.5% of turnover under section 113 of the Income Tax Ordinance, 2001 up to Tax Year 2019 and 1% thereafter as against the prevalent rate of minimum tax at rate of 1.25% introduced through Finance Act, 2018.

Sources added that this facility of reduced rate of minimum tax at rate of 0.5% for large trading houses under clause (57) of Part-IV of the Second Schedule was available up to the Tax Year 2019 prior to the Finance Act, 2018.

In order to promote and encourage the growth of such enterprises the facility of reduced rate of minimum tax at rate of 0.5% in the case of large trading houses has been extended up to June 30, 2021 through the Finance Act, 2018.