Tax credit allowed for hiring fresh graduates

Tax credit allowed for hiring fresh graduates

KARACHI: In order to generate employment in the country, the government allowed tax credit to employers for hiring fresh graduates from July 01, 2019.

According to Deloitte Pakistan, a new section is proposed to be introduced through the Finance Bill 2019 in order to encourage creation of employment opportunities for fresh graduates.

A person employing fresh qualified graduates, having graduated after 1st July 2017, from universities or institutions recognized by the Higher Education Commission would be given a tax credit to the extent of the lesser of amount of annual salary paid to fresh graduates or, 5 percent of persons taxable income for the year.

Further, tax credit would be allowed in the year in which the fresh graduates are employed.

However, the credit will be restricted to salary of those numbers of fresh graduates not exceeding 15 percent of the total employees.