The Government of Pakistan has introduced a significant tax incentive for women-owned businesses. This incentive provides a 25% reduction in the tax payable on profits and gains derived from business activities chargeable to tax under the head “Income from Business.”
Eligibility Criteria:
To qualify for this tax reduction, the business must meet the following conditions:
- Date of Establishment: The business must have been started after July 2021.
- Women Ownership: The business must be 100% owned by women, either as a sole proprietorship, a company, or an association of persons (AOP).
Nature of the Tax Reduction:
It’s important to note that this is a reduction in tax liability, not a deductible allowance. This means that the reduced tax amount is directly subtracted from the total tax payable.
Benefits for Women-Owned Businesses:
This tax reduction aims to empower women entrepreneurs and encourage their participation in the business sector. By reducing the tax burden, the government hopes to create a more favorable environment for women-owned businesses to thrive and contribute to the economy.
Key Points to Remember:
- The tax reduction applies only to profits and gains from business activities.
- The business must meet the specified criteria regarding ownership and establishment date.
- The reduction is directly applied to the tax liability, not as a separate deduction.
The 25% tax reduction for women-owned businesses in Pakistan is a significant step towards promoting gender equality and economic empowerment. By understanding the eligibility criteria and the benefits of this incentive, women entrepreneurs can leverage this opportunity to grow their businesses and contribute to the country’s economic development.
