8 percent minimum tax on service sector: body considers various proposals to substitute tax

The committee headed by Haroon Akhtar Khan Special Assistant to Prime Minister on Revenue to review 8 percent minimum tax on service sector has considered various proposals to substitute the tax under Section 153 (1)(b) of the Income Tax Ordinance, 2001. According to an official, one of the options is the continuation of the prevailing tax regime. The second option is to make the tax adjustable with preferably audit. Another option is to continue with 8 percent non-adjustable tax regime while allowing carry forward loss. The last option is to considerably reduce the rate of minimum tax to be charged as full and final liability.
Sources said that 11 sectors have agitated the 8 percent minimum tax regime, showing their net profit within the range of 2-3 percent. The committee deliberated at length each sector and decided that only 11 sectors will be given options or any concession, if approved by the competent authority. However, no other sector like telecom, which shirked making presentation to the committee, would be given relief. The representatives of courier companies, engineering services, tracker services, security services, freight forwarders, advertising, hotels, software houses and others submitted their viewpoint to the committee.