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Tag: super tax

  • Super tax made permanent for banks

    Super tax made permanent for banks

    ISLAMABAD: The levy of super tax has been made permanent for banking companies beyond Tax Year 2021, sources in Federal Board of Revenue (FBR) said on Monday.

    Tax Laws (Amendment) Ordinance, 2021 has been promulgated on February 12, 2021 after approval by the President of Pakistan.

    As per the ordinance the levy of super tax on banks shall continue beyond Tax Year 2021. Through the ordinance the levy shall apply in tax year 2021 and onwards.

    With this amendment the banks shall pay the super tax at four percent in subsequent tax years. For the banking companies the tax year 2022 has commenced from January 01, 2021.

    The one-time super tax was imposed by inserting Section 4B of Income Tax Ordinance, 2001 through Finance Act, 2015.

    The Income Tax Ordinance, 2001 explained the super tax as:

    “4B. Super tax for rehabilitation of temporarily displaced persons.― (1) A super tax shall be imposed for rehabilitation of temporarily displaced persons, for tax years 2015 and onwards, at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division.

    (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, other than brought forward depreciation, brought forward amortization and brought forward business lossess under Fourth, Fifth, Seventh and Eighth Schedules.

    (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.

    (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.

    (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.

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

    In tax year 2018 the rate of super tax was four percent for banking companies on percentage of income and three percent on person other than a banking company, having income equal to or exceeding Rs500 million.

    In tax year 2020 the tax rate at 4 percent was maintained for banking companies. However, in other cases it was abolished.

    With the new amendment, the banking companies shall continue to pay the super tax with not time frame.

  • TAX YEAR 2021: rate of super tax

    TAX YEAR 2021: rate of super tax

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of super tax to be applicable for tax year 2021 (July 01, 2020 – June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 after incorporating amendment brought through Finance Act, 2020. The FBR issued the following updated rate of super tax:

    Provided that in case of a banking company, super tax for tax year 2019 shall be payable, on estimate basis, by thirtieth day of June, 2018.

    Super tax was introduced through Finance Act, 2015 by inserting Section 4B to Income Tax Ordinance, 2001.

    The section 4B is read as:

    4B. Super tax for rehabilitation of temporarily displaced persons.― (1) A super tax shall be imposed for rehabilitation of temporarily displaced persons, for tax years 2015 and onwards, at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division.

    (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, other than brought forward depreciation, brought forward amortization and brought forward business lossess under Fourth, Fifth, Seventh and Eighth Schedules.

    (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.

    (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.

    (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.

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

  • FBR estimates additional revenue of Rs2 billion through changes in super tax

    FBR estimates additional revenue of Rs2 billion through changes in super tax

    ISLAMABAD: Federal Board of Revenue (FBR) has estimated additional revenue of Rs2 billion through proposed changes in law related to super tax.

    The changes have been introduced to Section 4B of Income Tax Ordinance, 2001 through Finance Bill 2019.

    The FBR in explanation to the Finance Bill said that presently brought forward depreciation and business losses are excluded while computing income for calculating liability of super tax.

    However, such losses are not excluded in the case of banking, insurance, oil and mineral exploration companies.

    In order to ensure similar tax treatment, brought forward business and depreciation losses have been excluded from income computed to calculate super tax in the case of the abovementioned sectors.

    FBR sources said that Large Taxpayers Unit (LTU) Karachi had submitted its proposals related to super tax with estimated revenue generation of Rs2 billion.

    The LTU Karachi in its proposals said that the proposed amendment would bring uniform chargeability of super tax to all taxpayers including taxpayers falling within the purview of Fourth, Fifth, Seventh and Eighth Schedules of Income Tax Ordinance, 2001.

    Fourth Schedule mainly deals with Insurance companies.

    Fifth Schedule is related to exploration and production companies.

    Seventh Schedule is about banking companies.

    While Eighth Schedule covers capital gains and National Clearing Company Pakistan Limited (NCCPL).

  • Super tax application may be amended to generate around Rs2 billion

    Super tax application may be amended to generate around Rs2 billion

    KARACHI: Federal Board of Revenue (FBR) may recommend amending application of super tax in the forthcoming budget 2019/2020 to generate around Rs2 billion.

    FBR sources said that the tax authorities had recommended amendments to Section 4B of Income Tax Ordinance, 2001 through Finance Bill, 2019.

    The sources said that it had been recommended to apply super tax on the income computed under Fourth, Fifth, Seventh and Eighth Schedules ‘other than brought forward depreciation and brought forward business losses.

    According to the recommendation, the proposed amendment would bring uniform chargeability of super tax to all taxpayers including taxpayers falling within the purview of Fourth, Fifth, Seventh and Eighth Schedules of Income Tax Ordinance, 2001.

    As per the ordinance the fourth schedule covers insurance companies, fifth schedule covers exploration and production companies, seventh schedule for banking companies and eighth schedule covers capital gains and National Clearing Company Pakistan Limited.

    The sources said that the proposed amendment will help the FBR to generate around Rs2 billion as revenue.

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

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

    In a move to bolster revenues and streamline the tax structure, the Pakistani government has increased the super tax rate for banking companies to 4 percent until the tax year 2021.

    (more…)
  • Finance Minister Asad Umar Unveils Economic Reform Package to Boost Investment and Exports

    Finance Minister Asad Umar Unveils Economic Reform Package to Boost Investment and Exports

    On Wednesday, Finance Minister Asad Umar took the floor of the house to present a comprehensive economic reform package aimed at promoting investment and exports in Pakistan.

    (more…)