Pakistan budget proposes sweeping tax exemptions for 100+ institutions
FBR plans tax relief for bar councils, charities, and for income earned during the ICC Champions Trophy 2025
Business Desk
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The Federal Board of Revenue (FBR) has proposed income tax exemptions for more than 100 institutions in the federal budget for fiscal year 2025–26.
According to the newly released Finance Bill, these exemptions will apply to a wide range of organizations, including government departments, private hospitals, bar councils, and various funds established under directives from the Prime Minister.
The FBR has proposed income tax exemptions for the Fauji Foundation, Army Welfare Trust, and Karandaaz Pakistan, with the exemption applicable retroactively from tax year 2015 onwards.
Other beneficiaries include Al-Shifa Trust Hospital Islamabad, the Pakistan Bar Council, Balochistan Bar Council, Islamabad Bar Council, Khyber Pakhtunkhwa Bar Council, Punjab Bar Council, Sindh Bar Council, Beaconhouse National University, and dozens of other institutions, according to the Finance Bill.
The bill also proposes an income tax exemption for the pension of a former President of Pakistan and his widow.
Currently, many of these non-profit organizations (NPOs) enjoy automatic income tax credits without needing formal approval. However, under the new proposal, such institutions will now require formal approval from the Commissioner of Income Tax to qualify for tax credits.
One of the key institutions under scrutiny is the Army Welfare Trust, among others, which will now be subject to periodic reviews. The FBR will assess whether these organizations continue to meet the eligibility criteria for tax exemptions.
Speaking on Wednesday, FBR Chairman Rashid Langrial emphasized that all NPOs will now be required to demonstrate that they are not generating commercial profits.
“From the next fiscal year, the FBR will conduct regular reviews of every NPO’s financial statements,” Langrial stated.
Additionally, the FBR has proposed a special exemption for income earned by the International Cricket Council (ICC) and its affiliates during the ICC Champions Trophy 2025, which was hosted in Pakistan.
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