Pakistan on Thursday waived the income tax on the earnings of the International Cricket Council and the foreign players from the Champions Trophy— a move that has also been endorsed by the International Monetary Fund.
The Economic Coordination Committee (ECC) of the cabinet gave the approval to exempt the income tax in the light of the hosting agreement of the International Cricket Council.
According to the decision, any income derived by ICC Business Corporation (IBC) or International Cricket Council (ICC) or employees, officials, agents and representatives of IBC and ICC will not be subject to any income tax.
The income of the ICC officials, players, coaches, medical doctors and officials of member countries, IBC partners and media representatives will also be exempted from the tax, according to the decision.
The ICC Champions trophy matches began on Thursday and the final is scheduled for March 9. Pakistan lost its opening match to New Zealand by a big margin.
The exemption will be enforced through a statutory regulatory order and the government will not seek parliament's approval in this regard, said a senior official of the Federal Board of Revenue.
An amendment will be made in the Income Tax Ordinance to exempt the income of the ICC and foreign players. However, the government remains indifferent to the sufferings of the salaried class, teachers and researchers.
The researchers and teachers were slapped with tax notices in December 2024 with a demand to pay income tax arrears from July 2025 on account of 25% tax rebate.
The FBR claimed in tax notices to the universities that the 25% rebate had been abolished in July 2022 and thus everyone should now pay tax including the arrears. The government has discussed the rebate issue with the IMF but it has not shown urgency to address the issue the way it moved to give income tax exemption to the ICC and foreign players.
The income of residents of Pakistan from the ICC Champions Trophy will still be subject to tax, according to the ECC decision. All resident persons in Pakistan associated with the Champion Trophy 2025 as well as Pakistan Cricket Board will continue to pay their income tax liability on their income in connection with the said tournament.
The ECC was informed that Pakistan has also taken prior approval of the IMF for waiving off the income tax on the earnings of the ICC, IBC and foreign players and coaches.
Some of the members of the ECC objected to giving the income tax exemption but the FBR informed that the other countries have also given such exemptions in the past.
Under the standardized hosting rights agreement between ICC and, the ICC demands that none of the revenues of IBC, ICC, any of their subsidiaries or any associates, any ICC members and any members of the delegation of any ICC Member participating in the event including players, coaches, medical doctors and officials and the umpires, referees and officials will be liable to any taxes or other deductions in the Host Country.
The Champions Trophy is the first global tournament to be hosted by Pakistan since 1996 Cricket World Cup which it co hosted with India and Sri Lanka. However, the United Arab Emirates was lately announced as a co-host due to India's refusal to play in Pakistan. Only the matches involving India will be played in the UAE.
The federal government has invoked the special powers to grant the income tax exemption, which are meant to give such waivers in the case of the bilateral or multilateral agreements. However, according to some experts, the ICC hosting agreement does not fall in the definition of either bilateral or the multilateral
The ECC also gave approval to extend the Framework Agreement between the Pakistan LNG Limited and the State Oil Company of Azerbaijan Republic (SOCAR) for the procurement of LNG. The existing one-year agreement is expiring in July but Pakistan decided to give the extension before the upcoming visit of Prime Minister Shehbaz Sharif to Azerbaijan.
The Azerbaijan ambassador to Pakistan had requested for the extension in the LNG Framework Agreement as part of preparation for the Prime Minister's visit to Azerbaijan. Under the Framework Agreement, the Pakistan LNG Limited has already purchased two LNG cargoes from SOCAR Trading, which were delivered in December 2023 and February, 2024.
The ECC also approved a Rs6.9 billion supplementary grant for the parliamentarians' schemes to be executed in three provinces and Islamabad.
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