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ISLAMABAD: The government has excluded small and medium enterprises (SMEs) from the purview of minimum turnover tax through amendments in the Finance Bill 2021. Through amended Finance Bill 2021, the Federal Board of Revenue (FBR) has amended the rules for computation of profit and gains for small and medium enterprises.

Under the amended rules, the export proceeds of the SMEs shall be subject to tax as per rates prescribed under the final tax regime. The provision of section 113 of the Income Tax Ordinance 2001 shall not apply to the SMEs.

The tax deductible under clause (a) of sub-section (1) of section 153 shall not be minimum tax, where payments are received on sale or supply of goods by the SMEs. The other provisions of the Ordinance shall apply mutatis mutandis to the SMEs.

Under the Amended Bill 2021, the income tax exemption to refineries shall be available for a period of 20 years beginning from the date ofcommencement of commercial production in the caseof new refinery and 10 years from the date of completion of upgradation, modernisation or expansion project of existing refinery. Provided further that the exemption under this clause shall only be available to those refineries whose products fulfil Euro-5 standards.

Copyright Business Recorder, 2021

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