Sunday Jun 14, 2020
KARACHI: The government has absorbed the losses of revenues worth Rs212 billion on account of exemptions granted on total income of individuals and organisations during the outgoing fiscal year, reported The News.
The tax exemption on total income had been granted at a time when the economy was facing challenges due to COVID-19 and the country needed additional revenue to fight against the pandemic and generate resources for social protection.
It is also surprising that the present government is against allowing exemption and concessions, but the facts are telling a different story. The Federal Board of Revenue (FBR) granted exemptions and concessions worth Rs378 billion on income tax during the outgoing fiscal year, compared to Rs142 billion in the last fiscal year.
The major chunk of exemption of Rs212.07 billion has been granted on total income. That means no tax on the income of individuals and organisations.
The FBR for the first time issued a list of 212 individuals and organisations, which availed comprehensive exemption on their income. According to tax officials, in case of income is exempted then there will be no questioning of the source of income and no audit will take place.
Major recipients of tax exemption on total income are: State Bank of Pakistan and State Bank of Pakistan Banking Services Corporation (Rs50 billion); profits and gains derived by a taxpayer from an electric power generation project (Rs26.88 billion); commutation of pension (Rs18.72 billion); retired government servants and military persons (Rs13.68 billion); trustees of recognised provident funds, approved superannuation funds, and approved gratuity funds (Rs13.118 billion); recipient of payments from provident fund (Rs12.7 billion); WAPDA (Rs8.31 billion); agencies of foreign governments, foreign nationals or any other non-residents persons approved by the federal government (Rs6.55 billion); Collective Investment Schemes or a REIT schemes (Rs5.228 billion); provincial social security institutions (Rs5.01 billion); income of individuals domiciled or companies and associations of persons resident in the erstwhile Tribal Areas (Rs4.45 billion); public sector universities (Rs4.24 billion); pensioners income (Rs2.78 billion); retiring personnel of armed forces or government servants under head of enchasment of leave preparatory to retirement (Rs2.77 billion); issuance of Sukuk (Rs2.77 billion); recipient of subsidies (Rs2.73 billion); Supreme Court of Pakistan – Diamer Bhasha and Mohmand Dams Fund (Rs2.135 billion); employees participating in a recognised provident fund (Rs2.1 billion); diplomats income (Rs1.16 billion); gratuities (Rs1.112 billion); employees receiving payments to meet expenses in the performance of duties (Rs1.16 billion); Khyber Pakhtunkhwa genera provident investment fund (Rs1.69 billion); Khyber Pakhtunkhwa pension fund (Rs1.1 billion); exporters of computer software (Rs1.23 billion); Institutions of the Agha Khan development Network Pakistan etc (Rs975 million).
Originally published in The News