Tax Rates: Federal government likely to take important decision
ISLAMABAD - Federal government is likely to take important decision over the issue of the corporate tax in the country.
The government is considering to freeze the corporate tax rate at the present level of 29 percent.
The corporate tax rate for the tax year 2019 (July 1, 2018–June 30, 2019 or companies having special tax year) has been fixed at 29 percent, other than for banking companies.
Through the Finance Act, 2018, it has been made part of the statute that the corporate tax rate will be reduced by up to 25 percent by the tax year 2023.
The corporate tax rate, other than the banking companies, is 30 percent for the tax year 2018.
According to the sources, the country was facing serious economic challenges due to twin deficits in the wake of tight foreign repayment schedule.
The decline in the corporate tax rate is one of the reasons for the shortfall in the revenue collection, and the previous government of PML-N had taken this decision in the budget presented in the election year.
The government needs a significant increase in revenue collection to create avenues for development and to curtail budget deficit.
The revenue collection target for the current fiscal year has been set at Rs. 4,398 billion.
FBR managed to collect around Rs. 1,300 billion during the first five months of the current fiscal year, posting a growth of 6.7 percent, compared with Rs 1.223 billion in the corresponding period last fiscal year.