May 4, 2024 The Pakistan Business Council (PBC) has put forward a significant proposal aimed at boosting economic activity among listed companies by recommending the abolition of the minimum tax. This suggestion is part of a series of amendments proposed for the fiscal year 2024-25 budget. Currently, listed companies are subjected to a minimum turnover tax of 1.25% as stipulated under section 113 of the Income Tax Ordinance, 2001. The PBC has criticized this rate as excessively high and disconnected from the practical realities of business operations. In its detailed proposal, the PBC articulated that the rate of the minimum turnover tax should not only be abolished for all listed companies to promote industrialization but also suggested a gradual reduction of the tax rate by 0.25% annually. By Tax Year 2027, this would see the rate reduced to just 0.5%. Furthermore, the PBC seeks to address the limitations related to the carry forward of the minimum tax. The Finance Act 2021 introduced a provision that allows the minimum tax to be carried forward and adjusted against future tax liabilities if no tax is payable for that year. However, the council pointed out that the current restriction, which limits the carry forward period from five years to three years, is particularly disadvantageous for startups and companies that are making substantial capital expenditures and likely to incur initial losses. In response, the PBC has recommended that the time limitation for the carry forward of the minimum tax should be abolished, allowing it to be carried forward indefinitely, or alternatively, extended to a more reasonable period of ten…