Tax relief on humanitarian donations, gifts: Revenue Division directed to process law amendments

ISLAMABAD: The Federal Cabinet has directed the Revenue Division to process amendments to law/rules to ensure genuine humanitarian donations and gifts are granted exemption from taxes and duties sans Cabinet’s approval, well-informed sources told Business Recorder.

The National Health Services, Regulations & Coordination (NHSR&C) Division recently briefed the Cabinet on issues related to maternal health and consequent health problems for mothers.

The Division apprised that Pakistan exhibits alarming nutrition deficiencies amongst pregnant women, and that currently 35.5% of women in the reproductive age group suffer from anaemia, 46.9% from iron deficiency, 81.2% from Vitamin-D deficiency, 27% from Vitamin-A deficiency, while 32.6 % were struggling with calcium deficiency.

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The Cabinet was further apprised that the World Health Organization (WHO) had recommended to the United Nations International Micronutrient Antenatal Preparation, containing 15 micronutrients labelled as Multiple Micronutrient Supplement (MMS) for pregnant women to cover micronutrient deficiency.

It was noted that ‘Kirk Humanitarian’ (KH) and Junaid Family Foundation’ (JFF), both US-based philanthropic organisations, had been donating MMS for pregnant women in Pakistan to improve their nutritional status; and that earlier two shipments had been received and provided to pregnant women in different districts of Pakistan free of cost; and that these shipments had landed in the country free of taxes and duties owing to a blanket approval that had been granted by the Government of Pakistan in the wake of the COVID-19 pandemic and Flood Emergency.

The NHSR&C Division stated that both KH and JFF have again donated another shipment of 1,036,800 bottles of MMS for pregnant women which would be provided free of cost through Lady Health Workers in all provinces of Pakistan. The shipment had arrived at Karachi seaport and was awaiting customs clearance.

The NHSR&C stated that it had approached the Federal Board of Revenue (FBR) vide letter dated 26th March 2024 to seek exemption from tax and duties under PCT Code 9913. In response, the FBR, vide O.M dated 28th March 2024, had conveyed that exemptions under 9913 were available only to hospitals and institutions which were Non- Profit Organizations, and that the NHSR&C Division did not fall under the ambit of PCT 9913.

Further elaborating, the NHSR&C Division informed that FBR had advised the Division that PCT 9908 (i) of Pakistan Customs Tariff allows exemption of duties and taxes on goods received as gifts or donations subject to recommendation of the Federal Government and concurrence of FBR.

Accordingly, the FBR had advised the NHSR&C Division to approach the Federal Government for approval of exemptions under PCT 9908.

It was noted that the Ministry of Finance had endorsed the proposal for grant of exemption of taxes and duties for the shipment of 1,036,800 bottles of Multiple Micronutrient Supplement (MMS) under the PCT Code 9908(i).

During discussion, the Cabinet took note of the procedural delays involved in obtaining exemptions, where applicable, from taxes.

The Cabinet directed the FBR to allow exemption from taxes and duties without delay in all genuine cases of donations that were within-its purview and duties on donations from abroad, particularly in the case of medicines, food supplements, relief goods etc.

The Cabinet emphasised that to prevent such goods from perishing and to expeditiously provide them to recipients, it was necessary to simplify and streamline the procedures for grant of exemptions from taxes and duties on donations. It was further added that the authorities processing such consignments, must, however, verify the genuineness of such cases.

The Cabinet further directed all Ministries/Divisions, including the National Health Services, Regulations & Coordination Division, to process all cases of donations expeditiously.

The Cabinet directed the FBR to allow exemption from taxes and duties without delay in all genuine cases of donations that were within-its purview.

With regard to cases beyond the competence of the FBR, the Cabinet directed the Revenue Division to process amendments in law/rules to ensure that genuine cases of humanitarian donations and gifts are granted exemption from taxes and duties without the need to seek approval of the Cabinet.

Copyright Business Recorder, 2024