ISLAMABAD: The federal government has allowed over 50 tax exemptions covering a broad range of entities — from welfare organisations and state institutions to the pension of a former president and his widow.
The Finance Bill is expected to be signed into law today by President Asif Ali Zardari, formally enacting it for the upcoming fiscal year 2025-26, starting from 1st of July.
While the Federal Board of Revenue (FBR) had already introduced a framework allowing tax credits for charitable and non-profit organisations (NPOs), the new legislation takes it a step further by granting full tax exemptions to a large number of such institutions.
Among the beneficiaries are:
- State institutions and corporations such as the State Bank of Pakistan (SBP), SBP Banking Services Corporation, FBR Foundation, Pakistan Council of Scientific and Industrial Research, WAPDA, and the Pakistan Agricultural Research Council.
- Entities involved in national infrastructure and disaster response, including the Diamer-Bhasha and Mohmand Dams Fund, Prime Minister’s COVID-19 Relief Fund, and the National Disaster Risk Management Fund.
- Welfare and development bodies such as the Army Welfare Trust, Fauji Foundation, Pakistan Poverty Alleviation Fund, National Rural Support Programme, and Karandaaz Pakistan.
The list also includes key government-endorsed funds:
- Chief Minister’s (Punjab) Relief Fund for IDPs
- Prime Minister’s Special Fund for Terrorism Victims
- Prime Minister’s Relief Fund for Flood, Earthquake and Other Calamities (effective from August 5, 2022)
- Balochistan Education Endowment Fund (BEEF)
- National Endowment Scholarship for Talent (NEST)
In the financial and investment sector, exemptions were granted to:
- Pakistan International Sukuk Companies (First, Second, and Third)
- WAPDA Sukuk Companies
- Islamic Naya Pakistan Certificates Company Ltd
- Pakistan Global Sukuk Programme Company
- Pakistan Mortgage Refinance Company
- Export-Import Bank of Pakistan
- Deposit Protection Corporation
Additionally, international financial and development institutions such as the International Finance Corporation (IFC), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), Islamic Development and Trade Finance Corporations, ECO Trade and Development Bank, and the Islamic Chamber of Commerce and Industry (OIC) were granted exemptions based on international agreements.
Other entities enjoying exemptions include:
- Shaheed Mohtarma Benazir Bhutto Institute of Trauma, Karachi
- National Memorial Bab-e-Pakistan Trust
- Aga Khan Development Network (Pakistan), as per the 1994 bilateral accord
- Saarc Energy Centre, Saarc Arbitration Council (SARCO)
- Commission on Science and Technology for Sustainable Development in the South (COMSATS)
- International Parliamentarians’ Congress
Legal and fiscal experts note that while some exemptions align with established international commitments and development goals, others — particularly personal pensions — may invite scrutiny over transparency and equitable taxation in the country’s fiscal policy.
The FBR is expected to release further clarifications once the Finance Bill is officially enacted.
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No exemption to disable persons on movable property