Karachi, December 18, 2024 – The Federal Board of Revenue (FBR) has officially ceased the issuance of No Objection Certificates (NOCs) for the registration of specialized trusts, including Employees Provident Funds, Gratuity Funds, and Superannuation Funds.
This decision marks a significant shift in the regulatory process concerning these trusts.
The FBR has communicated this directive to the Chief Commissioners of Inland Revenue (CCIRs) at Large Taxpayer Offices (LTOs), Medium Taxpayer Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs). According to the FBR, for registering a specialized trust under the Punjab Trust Act, 2020, or similar Trust Acts enforced within the Islamabad Capital Territory and other provinces, the trustee must now obtain an NOC from the relevant regulator. This NOC must include the prescribed information required for registering a specialized trust.
The FBR clarified that the term “regulator,” as referenced in Section 3 of the Punjab Trusts Act, 2020, is defined under Schedule IV of the Anti-Money Laundering Act, 2010. The FBR emphasized that, under current laws, it is not authorized or notified as a regulator in matters related to specialized trusts.
Consequently, the FBR has directed its field formations to discontinue issuing NOCs for specialized trusts such as Employees Provident, Gratuity, or Superannuation Funds. Applicants or taxpayers, whether their cases are pending or prospective, are advised to approach the federal government through the Finance Division to obtain the required NOC.
This move by the FBR is seen as part of its broader effort to streamline regulatory functions and ensure alignment with existing legal frameworks. By transferring the responsibility for issuing NOCs to the federal government, the FBR aims to eliminate any ambiguity in its regulatory authority concerning specialized trusts.
Industry stakeholders and taxpayers impacted by this decision are encouraged to seek further guidance from the Finance Division. The FBR’s decision underscores its commitment to adhering to legislative boundaries while ensuring transparency in its operations regarding specialized trusts.