Sources told Business Recorder here on Sunday that the FBR has now accepted a major demand of the national flag carrier to give 50 percent reduction in the minimum tax under Section 113 of the Income Tax Ordinance, 2001. The FBR has agreed to reduce minimum tax rate from 1 percent to 0.5 percent under Section 113 of the Ordinance, 2001 for PIA.
According to sources, the minimum tax has been collected irrespective of profit or loss under the relevant provisions of the Income Tax Ordinance 2001.
The national flag carrier had given a presentation to the FBR for reduction in the minimum tax. In order to facilitate the airline in its operations, it would be appropriate to provide some tax relief without creating any distortion in the tax system. The FBR will also play its due role in improving the financial condition of the airline by providing some tax relief to it.
Earlier, a draft reply was prepared by the FBR in which it was regretted that the tax reduction could not be given to the airline. Recently, the tax authorities thoroughly analysed the case of the national flag carrier and finally decided to reduce the minimum tax from 1 percent to 0.5 percent under Section 113 of the Ordinance, 2001.
Any draft has no legal grounds and it could not be considered as an authentic document of the FBR. The decision has been approved by the tax authorities and would be notified in due course of time, sources added.
Sources dispelled the impression that the FBR had rejected the proposal of the PIA for reduction in tax rate. Contrary to this, the representation of the airline had been sympathetically considered by the tax authorities and duly approved.
It had been reported that the financial losses of the airline had increased. The reduction in the tax rate would facilitate the airline to give some financial help in current circumstances.
However, this reduction in minimum tax would not create any discriminatory treatment for other airlines as only PIA had approached the FBR for such tax concession, sources added.
