The committee constituted by Finance Minister Ishaq Dar to review 8 percent minimum tax on service sector has directed the corporate service provider companies to provide financial data to justify any reduction in tax rate for specific services'' industry/sector. It is learnt that to review 8 percent tax on services sector the committee under Section 153 (1)(b) of the Income Tax Ordinance, 2001 would hear the viewpoints of service provider companies and associations here at the Federal Board of revenue (FBR) on Wednesday (today).
The FBR has called a meeting of the committee to review 8 percent tax on services sector under Section 153 (1)(b) of the Income Tax Ordinance, 2001 and determine minimum tax rate for each of the service sector. Dar has constituted a committee to review taxation u/s 153 (1)(b) of the Income Tax Ordinance, 2001. The committee comprises Special Assistant to the Prime Minister for Revenue Haroon Akhtar, (Chairman); Asim Zulfiqar, CA, Member; Ashfaq Ahmad Tola, CA, Member; Abid Shahban Advocate Member and Member Inland Revenue Policy, Member/Secretary.
The TORs of the committee will be to review the incidence of tax u/s 153 (1)(b) of the Income Tax Ordinance, 2001 and to determine what should be the minimum tax rate under this section for each of the service sector. The committee will submit its report later this month.
The Finance Minister has constituted a committee to look into the grievances of service providers in relation to minimum tax imposed on the corporate sector by the Finance Act 2015. The Committee has invited the service providers through their respective trade bodies to make presentations and give justifications for considering and recommending a reduction in the rate of minimum tax, if so warranted.
The companies are requested to make presentations on Wednesday, 16th September, 2015 at FBR, justifying minimum tax which in their opinion would be appropriate for their sector duly supported by financial data of at least three corporate representative entities of their sector and any other information that company considers would assist the committee.
The companies are required to provide the following information in respect of said three entities, for last three years:- Gross revenue; revenue generated from services; revenue where section 153(1)(b) is applicable (services rendered to prescribed persons); revenue where section 153(1)(b) is not applicable (services rendered to persons not prescribed); revenue generated from other activities; tax deducted under section 153(1)(b); taxable income or loss declared and total tax paid during the year.