Tax exemptions to be approved by cabinet today
ISLAMABAD: The federal cabinet, which is scheduled to meet on Tuesday (today) with the prime minister in the chair and will formally approve tax exemptions on the funds to be extended to the Prime Minister’s Covid-19 Pandemic Relief Fund 2020, till June 30, 2021.
The World Health Organization (WHO) has declared Covid-19 as pandemic since more than 190 countries of the world are facing outbreak of this virus. Pakistan is also facing an outbreak of this disease.
The number of patients is increasing and the situation has assumed the status of a national emergency requiring immediate measures.
In order to effectively combat the outbreak of this pandemic and alleviate its adverse impact, the prime minister on March 30, 2020 announced the establishment of the Prime Minister’s Covid-19 Pandemic Relief Fund-2020 in which philanthropists and overseas Pakistanis were encouraged to deposit money starting from April 1, 2020.
The money collected from the fund shall be utilised to provide food and financial assistance to the people of Pakistan affected by Covid-19.
The federal government is empowered, under Section 53(2) of the Income Tax Ordinance, 2001 to grant exemption/ relief from the imposition of any tax for the purposes of national security and national food security in emergency situations.
In the light of the current circumstances, the Finance Ministry has proposed the following tax relief measures till June 30, 2021; (i) exemption from income tax on any income derived by “The Prime Minister’s Covid-19 Pandemic Relief Fund-2020”; (ii) exemption of any amount paid as donation to “The Prime Minister’s Covid-19 Pandemic Relief Fund-2020”; (iii) exemption to the fund from minimum tax on turnover under Section 113 of the Income Tax Ordinance 2001; (iv) exemption from withholding taxes on any payment received by the fund pertaining to profit on debt, cash withdrawals from bank, advance tax on banking transactions and advance tax through banking transactions otherwise than through cash under sections 151, 231A, 231 AA and 236P of the Income Tax Ordinance 2001 and; (v) exemption from withholding tax for persons not appearing on the active taxpayers’ list on banking transactions other than cash under Section 236P for any payment made to “The Prime Minister’s Covid-19 Pandemic Relief Fund-2020”.
The prime minister has dispensed with the condition of submission of summary for approval by the Cabinet Committee for Disposal of Legislative Cases (CCLC).