ISLAMABAD: Pakistan Business Council (PBC) has recommended changes in Alternate Corporate Tax (ACT) saying that the current regime will discourage / penalize investment in the manufacturing sector.
In its budget proposals 2017/2018, the PBC said that the ACT was introduced through the Finance Act 2014 at the rate of 17 percent on the accounting income (with certain exclusions) of a company.
Tax under ACT is ascertained solely on the basis of accounting profit if the same is higher than normal corporate tax.
As the law stands today, a corporate can be subject to either one of three laws i.e. Corporate Tax at 32 percent of taxable income, Minimum Tax of 1 percent of turnover under Section 113 or an Alternative Corporate Tax at 17 percent of accounting profit.
The PBC said that ACT should be an Alternative Tax vis-àvis Corporate Tax (including Minimum Tax) instead of an additional form of minimum tax.
Without prejudice to the above, adjustment of unabsorbed tax depreciation and prior years’ tax losses be against accounting profits like those specified in section 113(8) and the adjustment of prior years’ tax credits under sections 65B & 65E and current year tax credits under section 65B to those companies which imported its significant plant and machineries prior to July 1, 2014.
The PBC said that business / investment decisions were made on the assumption that tax incidence will be based on taxable income or minimum tax on turnover. Taxpayers made investment decisions resulting in adjustable tax depreciation against subsequent years’ tax liability as per prevalent law.
PM directs petroleum minister to negotiate with refineries for diesel price relief
ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday directed Petroleum Minister Ali Pervaiz Malik to immediately reach Karachi and hold negotiations...
