Tax is a key factor to economic development of every country. Governments of every country give targets to their Tax authorities every year. Taxes are not the sole sources of income of the countries. They invest in banking sector, run industries, issue shares and bonds, provide services and many other activities in addition to collection of taxes. Rates of taxes in some countries are less and in some it is high.
It depends on the countries policies towards there public and also how much there institutions are strong to collect the taxes. Unfortunately, Pakistan is not in both factors. Our Collection is also not up to the mark and also tax rates on the luxury goods and corporate sector is not so high as compare to the rest of the world. Corruption is a main hindrance in Pakistan. In Pakistan, history and current rates of corporate taxes are as under:-
According to First Schedule (Part 1) – Division II (RATES OF TAXES):
1)- The rate of tax imposed on the taxable income of a company for the tax
year 2007 and onward shall be 35%.
2)- Provided that the rate of tax imposed on the taxable income of a
company other than a banking company, shall be 34% for the tax year 2014.
3)- Provided further that the rate of tax imposed on the taxable income
of a company, other than a banking company, shall be 33% for the tax year
4)- Provided further that the rate of tax imposed on taxable income of
a company, other than banking company shall be 32% for the tax year
2016, 31% for tax year 2017, 30% for tax year 2018 and 29% for tax
year 2019 and on wards.
5)- where the taxpayer is a small company as defined in section 2, tax shall be
payable at the rate of 25%
Provided that for tax year 2019 and on wards tax rates shall be as
set out in the following Table, namely:—
Tax year Rate of Tax
The table omitted through Finance Act, 2019. Omitted table is as under:
TAX year Rate of Tax
2023 on wards 25%] ”
Let us see now the HIGHEST rates of corporate taxes in the other countries of the World.