It has been planned by the PTI government to introduce a new legislation to remove income tax exemptions availed by the corporate industry in order to raise almost Rs200 billion in additional taxes as part of its efforts to renew the delayed International Monetary Fund (IMF) programme.
According to the report, the government is thinking to either introduce a finance bill in the National Assembly or declare a presidential ordinance next month in order to satisfy the demand of IMF for additional tax measures.
According to discussions, the legal alterations would not be enforced immediately, however, the application date could be from the next financial year.
Finance ministry revealed that the prime minister had again refused to increase electricity tariff by Rs1.48 per unit and it had also been conveyed to the IMF. The increase in electricity prices is among the four major demands of the IMF for reviving the loan programme.
The proposed arrangement for applying the new tax measures from next fiscal year was aimed at meeting the IMF condition of withdrawing income tax exemptions and at the same time not immediately burdening businesses with additional taxes in the wake of adverse impact of Covid-19 on the economy, said the sources.
They added that the FBR and the IMF technical staff were engaged in finalising the tax exemptions and income tax credits that could be withdrawn through the new legislation.
IMF officials and Pakistani authorities were discussing clause-by-clause the corporate income tax exemptions, said the sources. FBR sources said that the authorities were discussing with the IMF the corporate income tax exemptions, tax credits, and certain exemptions available under the Fifth Schedule of the Income Tax Ordinance to oil and gas exploration and production firms.