Thursday, 30 March 2023

Political parties exempted in Budget from filing income tax returns and paying taxes

The government proposed to exempt all registered political parties of Pakistan from the obligation of submitting their annual income tax returns and wealth statements and other related record. Finance Bill 2021 presented on last Friday.

Table of Contents

Proposed Amendment

The Pakistan Tehreek-i-Insaf (PTI) government included the “Political Parties registered with Election Commission of Pakistan” in Table 1 of clause 66 of the second schedule of Income Tax Ordinances.

The government presented the Finance Bill before the National Assembly. The part one of the second schedule exempts incomes of entities and individuals from tax. While Clause 66 says that, “Any income derived by the following institutions, foundations, societies, boards, trusts and funds” will be exempted from the tax.

The political parties included in table one of the clause 66. It exempting them from the requirement of filing annual income tax returns and wealth statements.

“We have proposed to include the political parties in the table 1 of the clause 66. But after receiving inputs from various stakeholders. We have again decided to tax the income of the political parties,”. It was said by the Member Inland Revenue Policy Tariq Chaudhry while talking to the media.

Approval of the amendment

However, any amendment in the Finance Bill that already tabled in the Parliament. It can only make at the time of budget speech and approval of the Finance Act. Which means that the amendment will remain part of the Bill until not approved by the parliament.

Tax Exempted Entities

The political parties among 15 other entities that exempted from the purview of the income tax law. Including Islamic 1- Naya Pakistan Certificate Company. 2- Abdul Sattar Edhi Foundation. 3- Indus Hospitals. 4- Privatisation Commission of Pakistan. 5- Fauji Foundation. 6- Securities and Exchange Commission of Pakistan. 7- Sundus Foundation. 8- Ali Zaib Foundation, 9- Audit Oversight Board, 10- Make a Wish Foundation and the 11- Citizens Foundation.

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Political Parties | Exemption from Tax | Income Tax | Income Tax Returns | Wealth Statements | Annual Income Tax Returns | Budget | Amendment | Parliament | FBR | Federal Board of Revenue | Clause 66 |

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