ISLAMABAD: The federal government is planning to hike tax on dividend income to 20 per cent to generate an additional revenue of Rs35 billion.
As per a budget proposal, the government may charge advance tax on alternate corporate tax from the new financial year 2016-17, said sources. The financial implication of these three taxation proposals is estimated to be over Rs35 billion, which will be coughed up by big firms.
Such proposals highlight the inconsistency in the country’s taxation policies that have adversely affected foreign direct investment. Sources said the FBR had proposed that the companies declaring gross losses should be charged a minimum tax of 1% of their total turnover.
Currently, the companies declaring gross losses are exempted from the minimum tax. However, the companies that declared net losses are already liable to pay this tax.
