The low tax rate for traders has been introduced which has brought a good news for traders, up to Rs 100 Million Turnover the government has reduces the minimum tax rate from 1.5% to 0.5%.
The Federal Board of Revenue (FBR) introduced special features to highlight the changes to the Income Tax Ordinance 2001 of the Tax Laws (through Second Amendment) Ordinance 2001.
The FBR has reduced the standard rate of tax under section 113 of the Income Tax Ordinance 2001 to less than 1.5 per cent, and 0.5 per cent of the taxpayer tax is involved in the affairs of businessmen of trading and whose annual turnover is up to 100 million during tax year 2020.
FBR through Tax Amendment Ordinance reduces minimum tax under section 113 of the Income Tax Ordinance, 2001 from 1.5 percent to 0.5 percent for traders having turnover up to PKR 100 million.
— KLA Pakistan (@KLAPakistan) January 7, 2020
Traders having turnover up to 100 million and have already submitted their tax returns for the tax year 2018, can get benefit from the option that they may pay same tax or higher tax for the tax years 2019 and 2020
In addition, in the definition of a trader, both the retailer, and a distributor involved in the business of buying and selling goods have also been included. But distributors have excluded it from the scope of this amendment.
Subsequently, for traders, being an individuals, and having turnover up to Rs 100 Million, shall not be required to act being an withholding agent to deduct taxes under Section 153 of the income tax ordinance 2001.