ISLAMABAD: Federal Board of Revenue (FBR) has issued rates of income tax for companies to be applicable during tax year 2021.
The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) incorporating amendments brought through Finance Act, 2020.
The FBR said that the rate of tax shall be 29 percent on the taxable income of a company for tax year 2021.
As per the Income Tax Ordinance, 2001, the tax rate on corporate entities has been defined as:
The rate of tax imposed on the taxable income of a company for the tax year 2007 and onward shall be 35 percent:
Provided that the rate of tax imposed on the taxable income of a company other than a banking company, shall be 34 percent for the tax year 2014:
Provided further that the rate of tax imposed on the taxable income of a company, other than a banking company, shall be 33 percent for the tax year 2015:
Provided further that the rate of tax imposed on taxable income of a company, other than banking company shall be 32 percent for the tax year 2016, 31 percent for tax year 2017, 30 percent for tax year 2018 and 29 percent for tax year 2019 and onwards.
Where the taxpayer is a small company as defined in section 2 of Income Tax Ordinance, 2001, tax shall be payable at the rate of 25 percent:
Provided that for tax year 2019 and onwards tax rates shall be as set out in the following Table, namely:—
Tax Year Rate of Tax
2019 24%
2020 23%
2021 22%
2022 21%
2023 and onwards 20%
