ISLAMABAD: Federal Board of Revenue (FBR) on Friday clarified that resident Pakistanis are not allowed to invest in Naya Pakistan Certificates (NPCs).
The FBR issued clarification to a news appeared in a national daily. The FBR said that the only non-resident individuals can purchase Naya Pakistan Certificate, who maintain bank account abroad or foreign currency account maintained in Pakistan. “It is also clarified that such individuals are not required to file returns of income,” according to a statement issued by the FBR.
However, the FBR clarification is contrary to the explanation of the ministry of finance and State Bank of Pakistan (SBP). In a joint press release issued by the ministry of finance and the SBP on November 12, 2020 clearly mentioned: “Resident Pakistanis who have declared their assets abroad can also invest in US denominated NPCs.”
The FBR explained in details the legal provisions of Income Tax Ordinance, 2001 about the treatment of tax for non-resident.
The FBR said that Naya Pakistan Certificate, a new instrument launched by the Government/ State Bank of Pakistan, qualifies as debt instrument in terms of Clause (5AA) of Part-II of the Second Schedule of the Income Tax Ordinance, 2001.
Therefore, profit on debt on the Naya Pakistan Certificate is subject to tax at the rate of 10 percent which is final tax.