FIN623 Taxation Management GDB No.2 Solution Fall Semester 2013


Learning Objective

To understand the Tax treatment for Microfinance Banks in Pakistan as per Income tax Ordinance 2001.

Discussion Question:
Taxation management is becoming significantly important with the passage of time due to the dynamic nature of businesses, tax rebates, tax concessions and tax holidays. There has always a higher demand for well-qualified tax professionals, having in-depth knowledge of tax laws prevailing in the country. Reaping the tax benefits owing to flexibility in the tax laws is the essence of taxation management and hallmark of efficient tax professionals in any capital driven society.
Domestic Microfinance Bank (DMB), a well reputed bank, has been promoting micro credit trends in Pakistan since the last 2 decades. DMB has earned Rs. 50 million in tax year 2011. Mr. A – a newly appointed tax manager at the bank has computed the tax payable on the bank’s taxable income at the prevailing tax rate of 35% and filed the tax return accordingly.
You are required to elaborate whether the taxation treatment adopted by the MR. A is right or not for the DMB? Justify your comments along with solid reasons.

Note: Complete your comment within 100 words

Important Instructions:

1. Your discussion must be based on logical facts.

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2. The discussion board will remain open for 3 working days/ 72 hours.

3. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.

4. Obnoxious or ignoble answer should be strictly avoided.

5. Questions / queries related to the content of the discussion board, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of discussion board is over.