ITO Section 5A

Tax on undistributed profits.

(1) For tax  [years 2017 to 2019], a tax shall be imposed at the rate of  [five] percent of its accounting profit before tax on every public company, other than a scheduled bank or a modaraba, that derives profit for a tax year but does not distribute at least  [twenty] percent of its after tax profits within six months of the end of the tax year through cash  [ ]:

Provided that for tax year 2017, bonus shares or cash dividends may be distributed before the due date mentioned in sub-section (2) of section 118, for filing of a return.

(2) The provisions of sub-section (1) shall not apply to—

• (a) a company qualifying for exemption under clause (132) of Part I of the Second Schedule; and
• (b) a company in which not less than fifty percent shares are held by the Government.]