ISLAMABAD: The government has changed the definition of Small and Medium Enterprise (SME) to increase in business turnover limit of a manufacturer from Rs250 million to Rs800 million to qualify for concessionary tax regime for SMEs and inclusion of IT &ITeS in SMEs definition.
Through Finance Bill 2023, various amendments for increasing the revenue measures have been proposed in the Income Tax Ordinance, 2001 (Ordinance).
The section 2 (29) of the Income Tax Ordinance is proposed to include a new Section 236Z which proposes to tax the issuance of Bonus Shares in the hands of the shareholder by the company @ 10% of the value of Bonus Shares. This amount will be collected from the shareholder before the shares are issued.
In case the shareholder does not do so the shares to the extent of tax may be disposed of by the company to recover the tax. The scope of ‘Other Income’ as provided in Section 39 of the Ordinance is also proposed to be amended to term it as Income from ‘Other Sources’. This tax will be Final Tax, tax expert explained.
The definition of Small and Medium Enterprise in Section 2 (59A) of the Ordinance is replaced to increase the turnover from Rs250 million to Rs800 million with IT services and IT enabled services also to be considered as Small and Medium Enterprises.
Copyright Business Recorder, 2023
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