Finance Act 2015: Companies liable to pay min tax on revenue earned from services

From July 1, 2015, the companies who are filers will be liable to pay minimum tax on the revenue earned from services rendered or provided to persons, who are withholding agents under section 153 at the rate of 8 percent of the revenue whereas in case of non-filers tax is 12 percent.
According to the comments, effects and implications of the Finance Act 2015 issued by the Amir Alam Khan & Co Chartered Accountants, from July 01, 2015 the companies who are filers will be liable to pay minimum tax on the revenue from services rendered or provided to persons who are withholding agents under section 153 @ 8 percent of the revenue and in case of non-filer companies the rate of minimum tax is 12 percent. This effectively means the minimum margin of net taxable income to the revenue of 25 percent for filers and 37.50 percent for non-filers, which in case of certain service provider companies will be a big burden on their tax bill.
It said that the tax deducted under section 153 for rendering of or providing of services was minimum tax for any person including a company. Due to bad drafting of amendments made in section 153(3) from time to time a dispute arose as to whether such tax is minimum tax for a company as well or not. This issue also came up before the Honourable Federal Tax Ombudsman and implementation of his order are pending. In order to resolve this issue clause (79) of Part IV of 2nd Schedule was inserted through a notification dated October 31, 2011 granting exemption from minimum tax on rendering or providing services by a company. This by default was applicable from October 31, 2011 onwards. On the other hand the issue whether tax deducted from services is minimum tax for companies since July 01, 2008 to October 30, 2011 was in dispute between the FBR and Federal Tax Ombudsman.
In the Finance Bill 2015, as originally introduce in the Parliament, it was proposed to kill the judgement of the Federal Tax Ombudsman by amending section 153(3) retrospectively from tax year 2009 to provide exemption to the companies from the applicability of minimum tax on rendering of or providing of services and omitting clause (79) of Part IV of 2nd Schedule, it said.
In the Finance Act, 2015, as finally approved by the Parliament, the amendment in section 153(3) has been withdrawn but the omission of clause (79) of Part IV of 2nd Schedule remains intact. In consequence, the position of minimum tax on services rendered or provided by companies is as under: from July 1, 2008 to October 30, 2011, the provisions of minimum tax are attracted. From October 31, 2011 to June 30, 2015, the provisions of minimum tax are not attracted and from July 1, 2015 onwards, the provisions of minimum tax are attracted, commentary of the chartered accountant company added.