ISLAMABAD: The government to withdraw a large number of tax exemptions through an ordinance on Thursday after the approval of President of Pakistan.
The federal cabinet has approved the amendments to the Income Tax Ordinance, 2001 to withdraw tax exemptions. Tax Laws (Second Amendment) Ordinance, 2021 to be promulgated after the approval of the president.
The executive board of International Monetary Fund (IMF) approved $500 million for Pakistan under Extended Fund Facility (EFF) on Wednesday.
Withdrawal of income tax exemption was one of the conditions for the IMF disbursement.
According to the draft ordinance approved by the federal cabinet, significant amendments have been made to Second Schedule of the Income Tax Ordinance, 2001.
The second schedule is related to tax exemptions and concessions granted to different sectors of the economy and individual entities.
The concessionary regime for Non-Profit Organization (NPOs) has been redrafted and limited the scope of exemption and concession.
Sources in the Federal Board of Revenue (FBR) said that most of the exemptions had been converted with the tax credit.
Many provisions related to tax exemptions have been deleted that were already expired, the sources added.