Supertax applicable to TY22

ISLAMABAD: The supertax imposed on 13 large industries through the amended Finance Bill 2022, would be applicable to the tax year (2021-22), sources told Business Recorder on Saturday.

According to sources, the one-time supertax would be applicable to Tax Year 2022 for companies and sectors specified in the amended Finance Bill 2022.

The companies liable to pay supertax would deposit the amount at the time of filing of income tax returns in December 2022.

However, high-income earner individuals and the Association of Persons (AoPs) would pay the tax in the income tax returns to be filed for Tax Year 2022 during September 2022. As per Finance Bill 2022, after section 4B of the Income Tax Ordinance 2001, the following new section shall be inserted, namely:–“4C. Tax on high-earning persons for poverty alleviation? A tax shall be imposed for poverty alleviation for the tax year 2022 and onwards at the rates specified in Division IIB of Part I of the First Schedule, on the income of every person, it added.

The prime minister has announced the imposition of a 10 percent “super tax” on 13 sectors including steel, banking, cement, cigarettes, chemicals, beverages, and liquefied natural gas (LNG) terminals,” airlines, textile, automobile, sugar mills, oil and gas, and fertiliser.

This tax will be imposed through an amendment in the Finance Bill, 2022 before it is passed by the National Assembly.

PM Shehbaz slaps 10% 'super tax' on large-scale industries

Through amended Finance Bill 2022, an additional tax (poverty alleviation tax) of one percent would be imposed on individuals and entities whose annual income exceeds Rs150 million but does not exceed Rs200 million. Similarly, those with an annual income of over Rs200mbut less than Rs250 million would be subject to an additional tax of two percent, those earning more than Rs250 million but less than Rs300 million to three percent and those having an annual income of more than Rs300 million would be taxed four percent of their income.

The proposed tax of 10 percent for the specified sectors will be inclusive of this additional tax.

When contacted, a tax expert told Business Recorder that normally a tax imposed in a Finance Act is applicable for the next year but the Parliament has the power to implement it even for the current year and this power is being exercised through the proposed section 4C of the Income Tax Ordinance and will similarly be exercised for the “supertax” of 10 percent.

Thus, the additional revenue from these measures will be available in the next fiscal year beginning from July 1, 2022, he added.

Copyright Business Recorder, 2022