Taxation System Chapter- 04
“small and medium enterprise” [U/s (59A)] means a person who is engaged in manufacturing as defined
in clause (iv) of sub-section (7) of section 153 of the Ordinance and his business turnover in a tax year
does not exceed Rs. 250 million:
Provided that if annual business turnover of a small and medium enterprise exceeds two hundred and
fifty million rupees, it shall not qualify as small and medium enterprise in the tax year in which annual
turnover exceeds that turnover or any subsequent tax year.
"Small Company" [U/s 2(59AB)] means a company registered on or after 1.7.2005, under the Companies
Act, 2017 , which,-
(i) has paid up capital plus undistributed reserves not exceeding Rs.50 million;
(ia) has employees not exceeding 250 at any time during the year;
(ii) has annual turnover not exceeding Rs.250 million; and
(iii) is not formed by the splitting up or the reconstitution of company already in existence;
(iv) is not a small and medium enterprise as defined in clause (59A);
Explanation: 'Small Company" is denned to mean a company registered on or after 1st July 2005 under
the Companies Act, 2017 having paid-up capital plus undistributed reserves not exceeding Rs. 50 million
and has an annual turnover not exceeding Rs. 250 million and the number of employees during the year at
any time should not exceed 250. To qualify under this category the company should not be formed by the
splitting up or the reconstitution of the business already in existence. There has been a demand to promote
corporate culture in the country to encourage formal and documented businesses.
"Special Judge " [U/s 2(59B)] means the special judge appointed u/s 203.
"Special Purpose Vehicle" [U/s 2(60)] means a Special Purpose Vehicle as defined in the Asset
Backed Securitization Rules, 1999;
“specified jurisdiction” [U/s 2(60A)] means any jurisdiction which has committed to automatically
exchange information under the Common Reporting Standard with Pakistan;
"Speculation business" [U/s 2(61)] "speculation business" means any business in which a contract for
the purchase and sale of any commodity (including stocks and shares) is periodically or ultimately settled
otherwise than by the actual delivery or transfer of the commodity, but does not include a business in
which-
(a) a contract in respect of raw materials or merchandise is entered into by a person in the course of a
manufacturing or mercantile business to guard against loss through future price fluctuations for the
purpose of fulfilling the person's other contracts for the actual delivery of the goods to be
manufactured or merchandise to be sold;
(b) a contract in respect of stocks and shares is entered into by a dealer or investor therein to guard
against loss in the person's holding of stocks and shares through price fluctuations; or
(c) a contract is entered into by a member of a forward market or stock exchange in the course of any
transaction in the nature of jobbing arbitrage to guard against any loss which may arise in the
ordinary course of the person's business as such member.
"Stock fund" [U/s 2(61A)] means a collective investment scheme or a mutual fund where the investible
funds are invested by way of equity shares in companies, to the extent of more than seventy five (75%) of
the investment.
"Stock-in-trade" [U/s 2(62)] "stock-in-trade" means anything produced, manufactured, purchased, or
otherwise acquired for manufacture, sale or exchange, and any materials or supplies to be consumed in the
production or manufacturing process, but does not include stocks or shares;
Explanation: The persons who are dealing in stocks or shares will not be taxed u/s 18 and in their case
any gain or loss arising from the disposal of such commodities will be considered as capital gain.