The Income Tax (Second Amendment) Ordinance, 2015, was laid before the National Assembly on Friday.
The ordinance was laid by State Minister for Petroleum Jam Kamal on behalf of finance minister with an aim to resolve the hardships caused to corporate service providers resulting from treating the tax deductible as per 153(1) (b) Income Tax Ordinance, 2001, at the rate of 8 percent as minimum tax.
The amendment envisages provision of two mutually exclusively options for the corporate sector of freight forwarders, air cargo services, courier services, manpower suppliers, hotel service security guard services, software development services, trakker services, advertisers, share registrar services, engineering services and car rental services.
According to the first option, the aggrieved corporate service sector would be allowed to opt out of the minimum tax regime provided the said aggrieved corporate service sectors offer themselves for audit by an irrevocable undertaking in writing in advance by October 15, 2015, or the date decided by the government for the tax year 2016.
As per the other option, the aggrieved corporate service would be allowed to carry forward the tax paid under section 153(1)(b) Income Tax Ordinance, 2001 in excess of their tax liability, otherwise for 10 years in the same manner as carry forward of the minimum tax under the ordinance is allowed.
The rate of minimum tax of 8 percent would remain intact for the corporate service sector and non-exemption certificate will be issued. The ordinance would also facilitate to rationalise the provisions regarding exemption from withholding tax on certain banking transactions thereby preventing loss to the national exchequer.