| GEO Business|
| FBR exempts ADB from taxes|
| Updated at: 0346 PST, Sunday, September 28, 2008|
ISLAMABAD: Federal Board of Revenue (FBR) has exempted the Asian Development Bank (ADB) from payment of all taxes, including payment and collection of withholding taxes, says an official statement issued here Saturday.
It says the exemption was already being enjoyed by the ADB under a proviso to section 54 of the Income Tax Ordinance, 2001.
However, the proviso was withdrawn following an amendment made through Finance Act, 2008, leaving no cushion or protection to the ADB income from levy of taxes with effect from tax year, 2009 and onwards.
The ADP however took up the matter with the Ministry of Finance, requesting for continuation of exemption to the bank as allowed earlier on under Article 56 of the Asian Development Bank Ordinance, 1971, which deals with the implementation of international agreements for establishment and operation of the bank and protects the bank’s income from levy of all taxes, including payment and collection of withholding taxes.
The FBR, therefore, has again allowed the exemption to the ADB by amending the Second Schedule to the Income Tax Ordinance, 2001 and adding new clauses vide SRO No. 1012(I)/2008 dated 23.09.2008 whereby the ADB’s income has been exempted from all taxes as “under the Asian Development Bank Ordinance, 1971 (IX of 1971)”.