Understanding the 25% Tax Reduction for Women-Owned Businesses

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 Commencement: 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.

Purpose of the Incentive:

The primary objective of this tax reduction is to empower women entrepreneurs and encourage their participation in the Pakistani economy. By reducing the tax burden on women-owned businesses, the government aims to create a more favorable environment for their growth and development.

Benefits for Women Entrepreneurs:

• Increased Profitability: The reduced tax liability can enhance the profitability of women-owned businesses.
• Enhanced Competitiveness: Lower tax burdens can make these businesses more competitive in the market.
• Economic Empowerment: The incentive contributes to the economic empowerment of women by providing them with greater opportunities and resources.

This article was published at 25% Tax Reduction for Women-Owned Businesses