The government has abolished the tax exemption, worth Rs.150 billion to the corporate sector through Presidential ordnance in order to fulfill the terms and conditions of IMF in connection with its stalled programme.
In this ordnance, more than 75 amendments have been made. Along with Shaukat Khanum Memorial Trust, Sharif Trust, Alamgir Welfare Trust, Lahore University of management sciences, Pakistan sweet home Angels and Fariries Trust, Sardar Trust Eye Hospital, Lahore, Al-Shifa Eye Trust Hospital, Aziz Taban Foundation, Sharif Trust, The Kidney Centre postgraduate Institute, Pakistan Disabled Foundation, Supreme Court of Pakistan Diamir Mahmond Fund 62 institutions’ tax exemption has not been abolished and 62 institutions have been given the facility of the tax credit.
Under this ordinance, the display of NTN or Business cards has been made compulsory otherwise, a fine would be imposed. Under this ordinance, the tax exemption for the fresh graduates has also been withdrawn. Tax exemption, given to the film industry has also been abolished. The tax exemption to Pakistan Cricket Board and other sports organizations has been converted to the tax credit.
Under this ordinance, the amendment has been made in Income Tax Ordnance 2001 by which clause C subclause B has been waived off. Section 64 C under which tax exemption that was being given to the employers on offering the jobs to the fresh graduates have been waived off. Moreover, section 65 C has also been abolished under which tax exemption on enlistment has been abolished.
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In this ordnance, clause 65 has been included under which the facility of the tax credit has been given to the investment in the projects of coal mining and the coal, supplied to the power projects in Sind to the extent of 100 %.
Under clause 62, startup of business in the profession of IT during the tax year has been defined under which the startup certificate, issued by Pakistan software export board in the particular year will have the facility of tax credit during the next two years and in the income obtained through the computer software. IT services and other IT-related services will be given the facility of 100 % tax credit up to 2025.
However, 80 % of the income, obtained after rendering IT services and IT-related services will have to be brought to the banking system in the form of foreign exchange.