What Is The Income Tax Ordinance Of Pakistan And What Are The Implications Of This Law On Business And Individuals?

The income tax ordinance 1979 was promulgated through the finance ordinance on June 28, 1979 and come into force on the 1st July of the same year. It adopted all the basic concepts of the repealed income tax act 1922, so that the benefit of the whole case law built up over the last 57 years is not rendered useless.

This law continued to prevail in the country for 22 years. Under this law an income tax survey was conducted in 1999-2000. Moreover the government issued many tax amnesty schemes. However government felt that after 22 years of service the law is not fulfilling the requirements of a modern taxation system. Thus the government formed a commission on the basis of its recommendations a new income tax ordinance was promulgated with effect from 1st July 2002.

• This ordinance has been drafted with the following objects:
• To re-arrange the provisions in a more systematic and logical forms.
• To simplify the law so as to make it easily understandable by the taxpayer.
• To plug loop holes and remove lacunae and ambiguities.
• To rationalize and simply the existing provisions and to introduce new ones where necessary in the light of the decisions of the superior courts.

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