The government of Pakistan has announced a new minimum tax rate of 1% for companies listed on the Pakistan Stock Exchange (PSX). This proposal is part of the amendments to tax rates related to the Minimum Tax under the Income Tax Ordinance, 2001, as outlined in the Finance Bill, 2023.
The revised minimum tax rate chart, under the First Schedule of the Income Tax Ordinance, 2001, is as follows:
1. Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited (for cases where annual turnover exceeds one billion rupees): 0.75% of the person’s turnover for the year.
• Pakistani International Airlines Corporation
• Poultry industry, including poultry breeding, broiler production, egg production, and poultry feed production.
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2. Oil refineries, motorcycle dealers registered under the Sales Tax Act, 1990, and oil marketing companies: 0.5% of the person’s turnover for the year.
3. The following categories of businesses: distributors of pharmaceutical products, fast-moving consumer goods, and cigarettes; petroleum agents and distributors registered under the Sales Tax Act, 1990; rice mills and dealers; tier-1 retailers of fast-moving consumer goods integrated with the Board or its computerized system for real-time reporting of sales and receipts; turnover from supplies through e-commerce, including running an online marketplace; persons engaged in the sale and purchase of used vehicles; and flour mills: 0.25% of the person’s turnover for the year.
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4. For companies listed on the Pakistan Stock Exchange that are not covered in the aforementioned categories: 1% of the person’s turnover for the year.
5. In all other cases: 1.25% of the person’s turnover for the year.
These amendments aim to revise and streamline the minimum tax rates applicable to various sectors and ensure a fair contribution from listed companies on the Pakistan Stock Exchange. The implementation of these revised rates will help maintain tax compliance and generate revenue for the government.
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