ISLAMABAD:Federal Finance Minister Ishaq Dar, will lay the Income Tax (Second Amendment) Ordinance, 2015 before the National Assembly today (Friday). On October 31, President Mamnoon Hussain promulgated an ordinance to further amend the income Tax Ordinance 2001.
The clause-II of Article 89 of the Constitution requires the presentation of this said ordinance before the either house of the parliament for either approval or extension in the tenure for the promulgation of the ordinance.
A well-placed official source at Federal Board of Revenue (FBR ) told this scribe that Finance Minister had gained all the required documents as well as related material from the FBR to reply the questions and objections of the members in a befitting manner at the time of presentation of the said ordinance in the national assembly.
The source said that Finance Ministry had issued ordinance in the light of recommendations of a committee constituted for this purpose and it dealt with tax on services that was made a minimum tax in case of companies by virtue of omission of clause 79 to Part 1 of the 2nd Schedule to Income Tax Ordinance 2001.
The proposed changes included adding clause 94 to Part IV of 2nd Schedule to the Income Tax Ordinance read with changes brought in section 153 of the Income Tax Ordinance;
Minimum tax is made adjustable for maximum of 5 years for the following sectors (Companies not included in clause 94 i.e. sectors not given below cannot opt for such adjustment) freight forwarding services, air cargo services, courier services, manpower outsourcing services, hotel services, security guard services, software development services, tracking services, advertising services (other than by print or electronic media), share registrar services, engineering services or car rental services.
Under sub-section 4A added to section 153 an application (irrevocable and in writing before the November 15, 2015) to this affect has to be made to commissioner for choosing option of adjustability (by offering its accounts for audit within 30 days of filing of return for tax year 2016) and even in case such option a minimum tax at 2% must be paid and that also in advance on the basis of turnover of corresponding period of immediately preceding period.
This option is applicable only for tax year 2016 now only Tax payments enjoy exemption from (collection of) withholding of tax under section 236-P which after change looks like “advance tax under this section shall not be collected in the case of payments made for federal, provincial or local government taxes”.
