Income Tax in Pakistan is one of the top most contributors to Tax income of government of Pakistan. Many changes in taxation has been introduced to promote income tax registered persons as opposed to non-registered persons.
Taxation according to a person’s ability to pay is universally accepted principle, and income is considered a satisfactory though not a sufficient index of such ability to pay. Income Tax is, therefore, generally recognized as a highly equitable form of taxation. A tax levied on income can nor normally be shifted to others and thus its incidence is on those for whom it is intended. Since income tax is progressive in nature, it tends to reduce economic disparity. Tax rates and method of calculating taxable income varies with fiscal status of the tax payer. Following are the broad categories of taxpayers:-
Companies Association of Persons (AOP)
Capital Value Tax It is payable by individuals, firms and companies which acquire an asset by purchase or a right to use for more than 20 years.
Corporate Asset Tax It is levied through section 12 of the Finance Act, 1991. This is one time levy payable by a company as defined in Companies Ordinance, 1984, on the value of fixed assets held by the company on the “specified date”.