Income Tax Ordinance 2001: Corporate tax rate to be reduced to 25pc

KARACHI: The government has adopted to reduce corporate income tax rate gradually to 25 percent by tax year 2023 and onwards.

According to updated Income Tax Ordinance, 2001 released by the Federal Board of Revenue (FBR), the First Schedule, Part I, Division II explained the corporate rates.

Rates of Tax for Companies
(i) The rate of tax imposed on the taxable income of a company for the tax year 2007 and onward shall be 35%:

Provided that the rate of tax imposed on the taxable income of a company other than a banking company, shall be 34% 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% 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% for the tax year 2016, 31% for tax year 2017and 30% for tax year 2018 and thereafter as set out in the following Table, namely:-

Tax Year Rate of Tax
2019 29%
2020 28%
2021 27%
2022 26%
2023 onwards 25%

 

(iii) where the taxpayer is a small company as defined in section 2, tax shall be payable at the rate of 25%:

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 onwards 20%

 

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