PCMA demands restoration of group tax relief

Pakistan Chemical Manufacturers Association (PCMA) has said that the process of corporatization would badly be discouraged if the government did not restore group tax facility under Section 59B along with clause (103A) of the Income Tax Ordinance, 2001. The association's senior vice president Zafar Mahmood in a statement on Wednesday said the group tax relief, before the final approval of the federal budget, should be revived. He said that the government had introduced the concept of group taxation and group relief to promote corporatization and group formation, allowing the corporate entities to grow into conglomerates.
For this purpose, section 59B along with clause (103A) of the Income Tax Ordinance, 2001 regarding group relief have remained active till announcement of the current federal budget, he said adding that under this facility, a company owning 55 percent or more of a subsidiary company was to pay tax on dividend received from the subsidiary at the time of distribution to ultimate shareholders, thus curbing the chances of double taxation on dividend, he added. He said the facility was adopted by the government in line with best international practices to promote corporatization in the country, as a result of which a number of industrial groups had formed the group structures.