Super tax rate enhanced for banks; non-banks to be exempted from tax year 2020

KARACHI: The government has enhanced rate of super tax for banking companies to 4 percent till the tax year 2021.

The banks shall also pay 4 percent super tax for the tax year 2018.

Through Finance Supplementary (Second Amendment) Bill, 2019, presented on January 23, 2019 the rates of super tax have been amended.

The rate of super tax for banking companies were: zero percent, four percent, three percent and two percent for tax year 2018, 2019, 2020 and 2021, respectively.

However, by amending the Second Schedule of Income Tax Ordinance, 2001 the rate has been uniformed at 4 percent till tax year 2021.

The super tax rate for other than banking companies has been made at zero percent from tax year 2020 onwards. The companies and individuals other than banks shall pay super tax at 2 percent for tax year 2019.

The super tax was introduced through Finance Act, 2015 for the rehabilitation of temporarily displaced persons under Section 4B of the Income Tax Ordinance, 2001.

This section reads as:

Section 4B: Super tax for rehabilitation of temporarily displaced persons

Sub-Section (1): A super tax shall be imposed for rehabilitation of temporarily displaced persons, for tax years 2015 to 2020, at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division.

Sub-Section (2): For the purposes of this section, “income” shall be the sum of the following:—

(i) profit on debt, dividend, capital gains, brokerage and commission;

(ii) taxable income (other than brought forward depreciation and brought forward business losses) under section (9) of this Ordinance, if not included in clause (i);

(iii) imputable income as defined in clause (28A) of section 2 excluding amounts specified in clause (i); and

(iv) income computed under Fourth, Fifth, Seventh and Eighth Schedules.

Sub-Section (3): The super tax payable under sub-section (1) shall be paid, collected and deposited on the date and in the manner as specified in sub-section (1) of section 137 and all provisions of Chapter X of the Ordinance shall apply.

Sub-Section (4): Where the super tax is not paid by a person liable to pay it, the Commissioner shall by an order in writing, determine the super tax payable, and shall serve upon the person, a notice of demand specifying the super tax payable and within the time specified under section 137 of the Ordinance.

Sub-Section (5): Where the super tax is not paid by a person liable to pay it, the Commissioner shall recover the super tax payable under subsection (1) and the provisions of Part IV,X, XI and XII of Chapter X and Part I of Chapter XI of the Ordinance shall, so far as may be, apply to the collection of super tax as these apply to the collection of tax under the Ordinance.

Sub-Section (6): The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.

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