KARACHI: Multinationals operating in the country have asked Finance Minister Miftah Ismail to gradually reduce the general rate of minimum tax to 0.25 per cent from the existing 1.25pc.

In a letter to the minister for finance and revenue ahead of the national budget announcement due next week, the Overseas Investors Chamber of Commerce and Industry (OICCI) demanded that the reduced rate should be applicable to gross profit instead of sales for oil marketing companies, refineries, LNG terminal operators, large chemical companies, authorised dealers of local vehicle manufacturers, distributors and traders — businesses that usually have high turnover and low margins.

Where the tax payable by a company is less than 1.25pc of its turnover, it’s required to pay a minimum tax equivalent to 1.25pc of the turnover, according to accountancy firm Pricewaterhouse­Coopers.

The OICCI sought relief from multiple taxation for its multinational members. The distribution of dividends within companies eligible for group relief should not be deemed a taxable event, OICCI Chief Executive M. Abdul Aleem wrote in the letter to the finance minister. “This is in line with the established global practice of protecting inter-corporate dividends from multiple taxation.”

To promote documentation and incentivise tax-compliant sectors, the OICCI said the government should restore the provision that gave tax credit of 3pc to companies that made 90pc of sales to sales tax–registered persons.

Published in Dawn, June 4th, 2022

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Afghan outreach
Updated 11 Jan, 2025

Afghan outreach

Islamabad should stress stronger counterterrorism measures, yet also engage the Taliban high command in Kandahar as well as politicians in Kabul.
Fragile recovery
11 Jan, 2025

Fragile recovery

STATE Bank Governor Jameel Ahmed appears to be quite optimistic over recent economic gains. That is not unusual;...
Destination Europe
11 Jan, 2025

Destination Europe

THE country’s aviation authorities can rest a little easy. After a four-year banishment from European skies,...
E-governance
Updated 10 Jan, 2025

E-governance

Wishing for a viable e-governance system seems like a pipe dream when stable internet connectivity is not guaranteed.
Khuzdar rampage
Updated 10 Jan, 2025

Khuzdar rampage

Authorities must explain how terrorists were able to commandeer the area for eight hours.
Beyond wheelchairs
10 Jan, 2025

Beyond wheelchairs

THE KP government’s Rs370m assistance programme for persons with disabilities is a positive step, not only in ...