Govt postpones meeting to discuss tax exemptions

It was supposed to discuss remissions for international organisations

ISLAMABAD: The federal government has postponed a key meeting of economic affairs ministry to contemplate problems related to tax exemptions for projects held by the United Nations and its institutions in the country.

As per a document of the ministry, a copy of which is available with The Express Tribune, a meeting aimed for discussion of sales tax cases about UN-based institutions in Pakistan was scheduled on Thursday. Dignitaries from the economic affairs division, top officials of the foreign ministry, finance ministry, State Bank of Pakistan, Securities and Exchange Commission of Pakistan (SECP), and Federal Board of Revenue (FBR) were about to attend the meeting.

However, the meeting has been postponed as per a letter issued by the economic affairs division. The foreign ministry and the FBR have also been formally informed about the postponement of the meeting.

According to economic affairs section officer Shaikh Farooq, the new date for the meeting has not been finalised yet.

However, sources within the ministry said that more than 10 UN institutions working in Pakistan are facing problems regarding cases about sales tax exemptions.

Tax collection stands at Rs278 billion in July

The UN had contacted the Foreign Ministry of Pakistan and discussed the issue its adverse impact on over 11 UN projects and services in the country, including — UN Educational, Scientific and Cultural Organisation (UNESCO), World Food Programme (WFP), UN Fund for Population  Activities (UNFPA), UN Human Settlement Programme (UN-HABITAT), UN Industrial Development Organisation (UNIDO), World Health Organisation (WHO), UN Information Centre Islamabad, United Nations Office for Drugs and Crime (UNODC) and Office of Coordination Humanitarian Affairs.

The UN director-general had requested the foreign ministry to consider the gravity of the issue following which the meeting was called on by the economic affairs ministry.

Such institutions and their projects are given general exemptions in taxes, sources said, but there are confusions regarding the application of sales tax on supplies of such projects.

Published in The Express Tribune, September 2^nd, 2019.