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Aftab Maken
ISLAMABAD: The Federal Board of Revenue (FBR) has announced that tax exemptions for non-profit organizations (NGOs) in Pakistan have been withdrawn. Instead, NGOs will now be eligible for a 100% tax credit, subject to certain conditions.
This was revealed by FBR Chairman Rashid Langrial during a meeting of the Senate Standing Committee on Finance, chaired by Syed Naveed Qamar.
Langrial said the decision means that NGOs will now fall under the FBR’s monitoring system. “The country can no longer afford unchecked tax exemptions. NGOs must now maintain proper documentation so that the FBR can verify the tax credit claims they submit,” he explained.
He also informed the committee that a new self-assessment declaration system has been introduced specifically for NGOs, allowing them to file their tax claims transparently.
No More Tax Exemptions for New Special Economic Zones
The FBR chairman further stated that tax exemptions given to Special Economic Zones (SEZs) will be phased out. SEZs already enjoying exemptions will retain them only up to 2035, and there will be no extensions beyond that. Any SEZs whose exemptions end by 2030 will not receive any further relief either.
“These changes are being implemented under commitments made with the International Monetary Fund (IMF),” Langrial said. “The IMF initially demanded an end to all tax exemptions by 2027, but we negotiated to extend that deadline to 2035. Now, we must remain firm on this agreement.”
Reward System for Compliant Taxpayers
For the first time, the FBR has introduced a reward system for compliant taxpayers, Langrial said. To qualify, 60% of the evaluation will be based on tax integrity. He added that sector-specific strategies will be adopted since tax evasion patterns vary across industries.
Private Sector Also Responsible for Tax Evasion
Langrial shared his personal perspective, stating that before joining the FBR, he believed the department was riddled with corruption. “But after coming in, I realized that many problems lie outside the FBR, especially in the private business sector,” he said.
He also disclosed some alarming statistics: in a country of 240 million people, only 1.2 million individuals have declared assets exceeding Rs 1 billion in their income tax returns.
