Amendment sought in incentive to Greenfield industry

KARACHI: The Federal Board of Revenue (FBR) has been urged to amend provisions related to incentive to Greenfield industrial undertaking.

According to proposals for budget 2022/2023 presented by Karachi Tax Bar Association (KTBA), incentive had been defined under Section 2(27A) of Income Tax Ordinance, 2001 related to Greenfield industrial undertaking.

The definition of Greenfield was introduced by Finance Act, 2020 through introduction of section 2(27A). One of the conditions to qualify as a Greenfield Industrial undertaking is that it is using any process or technology that has not earlier been used in Pakistan and subjecting this with requirement to get approval from Pakistan Engineering Board.

The tax bar said the incentive is though enshrined in the books yet it is not practically availed due to onerous requirement relating to novel technology.

The KTBA proposed to delete the condition relating to use of any process and technology not earlier used in Pakistan under this definition. “This condition is impracticable in an economy like Pakistan which in still in process of adopting new technology and has no research and development of its own to bring new technical expertise.”

Abolishing this requirement would create opportunities for local businessmen to acquire technology from developed world and lay foundation for industry and manufacturing.

This can also result in import substitution which is much needed for our country, the tax bar suggested.