Minimum tax

Although the rate of tax on individuals has been radically reduced but this benefit is nullified when we see that the rate of minimum tax on turnover under section 113 of the Income Tax Ordinance is 1.25 percent, which means if an individual has turnover of 11 million (which is normal even for a small retailer these days) his minimum tax liability would be Rs 137,500 which, according to new slabs, otherwise is payable on an income of around 3 million plus. Even according to old slabs, this tax is payable on income of around 1.5 million plus. By no stretch of imagination, income of 15 lac or 30 lac can be earned on turnover of 11 million. This totally nullifies the relief given by the PM. Alternately, people may suppress their turnover to avoid minimum tax. I think keeping in view the present rate of inflation, no minimum tax should be there for business having turnover up to Rs 100,000,000.00.
The rate of minimum tax at 1.25 percent also is too harsh and will make the new slabs meaningless, hence it would be appropriate if the rate of minimum tax is also reduced to original rate of 0.5 percent.