The government has decided to allow six sectors to avail 100 percent tax credit after withdrawal of income exemptions from IT services and IT enabled services; coal mining; green field industries; renewable energy and ship building projects.
Highly-placed government officials told Propakistani that the Income Tax (Second Amendment) Bill, 2021 has proposed replacement of income tax exemption with 100 percent tax credit to IT services and IT enabled services; coal mining; green field industries; renewable energy and projects of ship building.
These sectors would be allowed to avail 100 percent tax credit at the time of filing of income tax returns.
These sectors would not be required to pay any tax, but they would only required to maintain minimum documentation for claiming tax credit while filing of their income tax returns.
Income Tax (Second Amendment) Bill, 2021 will abolish 1.5 percent turnover tax or minimum tax applicable on the exempt entities.
Under the Second Schedule of the Income Tax Ordinance 2001, income tax exemption is available to the profits and gains derived by a taxpayer from a coal mining project in Sindh, supplying coal exclusively to power generation projects.
Under the Second Schedule of the Income Tax Ordinance 2001, income tax exemption can be claimed on the profits and gains derived by a taxpayer, from an industrial undertaking set up by 31st day of December, 2016 and engaged in the manufacture of plant, machinery, equipment and items with dedicated use (no multiple uses) for generation of renewable energy from sources like solar and wind, for a period of five years beginning from first day of July, 2015. [Provided that this clause shall also apply to such undertaking set up between the 1st March 2019 and the 30 th June, 2023 for a period of five years beginning from the date such industrial undertaking is set up.
Courtesy: Pro Pakistani