LAHORE: Federal Board of Revenue (FBR) is considering withdrawing exemptions and concessions granted in case of loss report by individual or corporate taxpayers in the upcoming budget, sources said on Tuesday.
The FBR sources rationalisation of concessions and exemptions granted under the minimum tax regime is under discussion to make it part of the final recommendation for the budget 2021/22.
The minimum tax is a tool to collect tax through an alternate way. The minimum tax has been levied under section 113 and section 113C of the Income Tax Ordinance, 2001. Section 113 of the Ordinance is applicable to a resident company, permanent establishment of a non-resident company, an individual having turnover of ten million rupees or above and an association of persons having turnover of Rs10 million or above.
The minimum tax on such persons having specific turnover is applicable in case of loss report for a year or the loss set off for an earlier year.
Similarly, under section 113C alternative corporate tax rate is applicable on companies having annual profit less then specified rate of tax under the statute.
The sources said the total tax collection in both the sections is Rs90 billion. However, an amount of Rs25 billion has been granted annually as exemption and concessions.