Additional Tax on Windfall Profit
Additional Tax on Windfall Profit : Finance Act 2023 to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws WHEREAS, it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws for the purposes hereinafter appearing;
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.
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.
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 30th June of the financial year whichever is earlier.
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