ISLAMABAD: The Additional Tax on windfall profits of sectors/industries would be applicable for last three preceding tax years commencing from Tax Year 2023 and onwards.
The Federal Board of Revenue (FBR) has issued Income Tax Circular Number 2 of 2023 on Thursday to explain important amendments made in the Income Tax Ordinance, 2001 (the Ordinance) through Finance Act2023.
According to the circular, Finance Act, 2023 has introduced a new section 99D which will provide for imposition of additional tax on windfall income profits and gains of any person being a company.
The federal government has been empowered under this section to prescribe any rate not exceeding fifty percent, specify any sector or sectors for which this section will apply, determine economic factor or factors including but not limited to international price fluctuation having bearing on any commodity price in Pakistan or any sector of the economy and or difference in income, profit or gains on account of foreign currency fluctuation, provide for the scope, time and payment of tax payable and include or exempt any person or classes of persons, any income or classes of income from the application of this section through a notification in the official gazette.
The FBR further explained that the corresponding amendments have also been incorporated in Fourth Schedule, Fifth Schedule and Seventh Schedule dealing with Insurance companies, Oil and Gas Exploration companies and Banking companies, respectively, the FBR maintained.
This section will apply for last three preceding tax years commencing from tax year 2023 and onwards. All notifications issued by the federal government under this section will be presented before the National Assembly within 90 days of the issuance of the notification or by June 30 of the financial year whichever is earlier, the FBR added.
Copyright Business Recorder, 2023