What does minimum tax generally require from a business with very low declared profit?
Correct answer: D. A minimum payment based on a prescribed measure such as turnover
- A. Payment of customs duty instead of income tax
- B. Complete exemption because profit is low
- C. Payment based only on the owner's personal assets
- D. A minimum payment based on a prescribed measure such as turnover
Explanation
Minimum tax provisions can require a business to pay a prescribed minimum amount even when its normal income tax is low or nil. In many systems, turnover or gross receipts are used as the relevant basis, subject to applicable law.
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About Taxation
Taxation covers the principles used to assess and collect taxes from individuals, businesses and transactions, with emphasis on income tax and sales tax concepts in Pakistan. Questions involve taxable income, exemptions, deductions, tax liability, withholding, returns, assessment, tax avoidance versus evasion, and the distinction between direct and indirect taxes.
Practise Taxation
50 free Taxation MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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