AIRLINK 58.23 Decreased By ▼ -0.37 (-0.63%)
BOP 6.24 Increased By ▲ 0.03 (0.48%)
CNERGY 3.97 Decreased By ▼ -0.02 (-0.5%)
DFML 16.07 Increased By ▲ 0.06 (0.37%)
DGKC 67.61 Increased By ▲ 0.29 (0.43%)
FCCL 17.82 Increased By ▲ 0.27 (1.54%)
FFBL 25.40 Decreased By ▼ -0.49 (-1.89%)
FFL 9.15 Increased By ▲ 0.01 (0.11%)
GGL 9.79 Increased By ▲ 0.02 (0.2%)
HBL 113.77 Increased By ▲ 1.27 (1.13%)
HUBC 111.61 Decreased By ▼ -3.68 (-3.19%)
HUMNL 6.55 Decreased By ▼ -0.04 (-0.61%)
KEL 4.39 Increased By ▲ 0.17 (4.03%)
KOSM 4.59 Increased By ▲ 1.03 (28.93%)
MLCF 37.73 Increased By ▲ 0.62 (1.67%)
OGDC 125.21 Increased By ▲ 8.81 (7.57%)
PAEL 22.61 Decreased By ▼ -0.10 (-0.44%)
PIAA 11.10 Increased By ▲ 0.31 (2.87%)
PIBTL 6.17 Decreased By ▼ -0.08 (-1.28%)
PPL 109.07 Increased By ▲ 5.07 (4.88%)
PRL 26.84 Increased By ▲ 0.45 (1.71%)
PTC 10.48 Increased By ▲ 0.95 (9.97%)
SEARL 52.85 Increased By ▲ 0.86 (1.65%)
SNGP 66.38 Increased By ▲ 1.26 (1.93%)
SSGC 11.01 Increased By ▲ 0.08 (0.73%)
TELE 7.13 Decreased By ▼ -0.08 (-1.11%)
TPLP 11.93 Decreased By ▼ -0.06 (-0.5%)
TRG 76.07 Decreased By ▼ -0.78 (-1.01%)
UNITY 20.47 Decreased By ▼ -0.02 (-0.1%)
WTL 1.30 No Change ▼ 0.00 (0%)
BR100 6,426 Increased By 94.3 (1.49%)
BR30 21,976 Increased By 345.9 (1.6%)
KSE100 62,816 Increased By 901.5 (1.46%)
KSE30 21,134 Increased By 282.7 (1.36%)

ISLAMABAD: The Presidential Ordinance on tax relief measures to be promulgated next week, may reduce the minimum tax rate from 1.5 percent to 0.25 percent for the dealers/distributors of steel products.

Official sources confirmed to Business Recorder that the Ordinance would be promulgated next week.

According to a letter of steel producers to Dr Waqar Masood Khan, special assistant to the prime minister on revenue, the manufacturers of steel products are operating on very thin profit margins, and similar earnings’ philosophy rests with the dealers and distributors of steel products.

Thus, the existing extortionate rate of minimum tax (1.5 percent) applicable under Section 113 of the Income Tax Ordinance, 2001 not only discourages the steel manufactures for future investments in the sector but it also becomes additional burden on their cash flows and discourages the supply chain of steel sector (distributor/dealers and retailers/traders) to document their business transactions with the FBR.

It is a counter-productive unfair tax that is not likely to produce the desired results, they said.

The manufacturers of steel products have been pursuing this matter since long and in principal there has been an agreement that this is an unfair tax on the documented sector which is already bleeding.

Therefore, the issue should be resolved in the upcoming ordinance and reduce the minimum tax rate from 1.5 percent to 0.25 percent for the dealers/distributors, under Section 113 of the Income Tax Ordinance 2001.

As a result of reduction in minimum tax rate, the distributors/dealers and retailers/traders will be encouraged to become part of the documented segments which would ultimately result in increased tax revenue for the government.

On similar grounds, the federal government has already facilitated dealers and sub-dealers of sugar, cement, and edible oil by reducing minimum tax rate from 1.5 percent to 0.25 percent by inserting clause 24(D) of part II of Second Schedule through Finance Act, 2019. The amendment through the upcoming ordinance will send a very positive message to the local steel industry that is in deep crisis right now, manufacturers of steel products added.

Copyright Business Recorder, 2021

Comments

Comments are closed.