Finance Bill 2014 reduces minimum tax; rate varies on amount of turnovers

KARACHI: The minimum tax has been reduced for diversified segments of the economies as the tax rate varies on amount of different turnovers however; the minimum value is at 0.2 percent.
As 0.5 percent minimum tax on percentage of the person’s turnover for the year will be charged from oil marketing companies, oil refineries, Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited ( for the cases where annual turnover exceeds rupees one billion.)
Similarly, Pakistan International Airlines Corporation and poultry industry including poultry breeding, broiler production, egg production and poultry feed production will be charged at 0.5 percent minimum tax.
It said that distributors of pharmaceutical products, fertilizers and cigarettes; petroleum agents and distributors who are registered under the Sales Tax Act, 1990; rice mills and dealers and Flour mills will be charged at 0.2 percent.
Motorcycle dealers registered under the Sales Tax Act, 1990 will be charged at 0.25 percent minimum tax and in all other cases the minimum tax will be charged at one percent.
However, transposition of the above provisions has resulted in following changes: distributors of the fast moving consumer goods have been excluded from a reduced rate of minimum tax of 0.2 percent and are now subject to minimum tax at one percent; the reduced rate of 0.2 percent is applicable to the distributors of cigarettes manufactured in Pakistan. By deletion of words “manufactured in Pakistan”, it appears the 0.2 percent rate of minimum tax shall apply to distributors of cigarettes including the imported cigarettes.