Extension in the period of reduced rate of minimum tax for Large Trading Houses [clause (57), Part-IV of the Second Schedule
Reduced rate of minimum tax for Large Trading Houses: Companies operating which simultaneously fulfill the conditions of having paid up capital exceeding Rs. 250 Million, owning fixed assets exceeding Rs. 300 million at the close of the Tax Year, maintaining computerized records of imports and sale of goods, having a system of issuance of 100% cash receipts on sales, presenting their accounts for audit every year and being registered under the Sales Tax Act 1990 are entitled to avail a reduced rate of minimum tax @ 0.5% of turnover under section 113 of the Income Tax Ordinance, 2001 up to Tax Year 2019 and 1% thereafter as against the prevalent rate of minimum tax @ 1.25% introduced through Finance Act, 2017.
This facility of reduced rate of minimum tax @ 0.5% for large trading houses under clause (57) of Part-IV of the Second Schedule was available up to the Tax Year 2019 prior to the Finance Act, 2018.
In order to promote and encourage the growth of such enterprises the facility of reduced rate of minimum tax @ 0.5% in the case of large trading companies has been extended up to 30th June, 2021 through the Finance Act, 2018.
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