Pakistan grants tax exemption to charities

KARACHI: Pakistan has granted income tax exemption to various charities through the Finance Act 2022.

The tax exemption was granted under the Second Schedule of the Income Tax Order 2001.

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According to the interpretation of the Finance Act 2022 by PwC AF Ferguson & Co., the income of the following organizations has been exempted from income tax by inclusion in Table I of clause (66):

(i) Pakistan Global Sukuk Program Company Limited;

(ii) Karandaaz Pakistan from tax year 2015;

(iii) Public-private partnership authority for the 2022 tax year and the following four tax years; and

(iv) Hamdard Laboratories (Waqf) Pakistan.

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It should be mentioned here that the income generated by The Pakistan Global Sukuk Program Company Limited was previously exempt from income tax through notification SRO 1457(I)/2021 dated November 11, 2021; however, through legislation, this tax exemption has been ratified by Parliament.

In addition, the following organisations, which previously enjoyed tax exemption subject to meeting the conditions specified in Section 100C of the Ordinance, now enjoy the unconditional tax exemption previously granted to them prior to the Finance Act of 2020:

(i) Pakistan Mortgage Refinance Company Limited;

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(ii) Pakistan Sweet Homes Angels and Fairies Place; and

(iii) Dawat-e-Islami Trust.

In addition, the following organizations have been granted tax exemption subject to meeting the conditions specified in Section 100C:

(i) Burhani Qarzan Hasnan Trust;

(ii) Saifee Hospital in Karachi; and

(iii) Safiyah Girls Taalim Trust.

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