ISLAMABAD: The federal government is to exempt income of International Cricket Council (ICC) from ICC Champions Trophy from all kind of taxes as the International Monetary Fund (IMF) has given its nod to the proposal of the Revenue Division.
Sharing the details, sources said, the ICC Champions Trophy is a quadrennial One Day International (ODI) cricket tournament organised by the ICC.
Pakistan was announced as the host of the 2025 ICC Champions Trophy on November 16, 2021 as part of the 2024-2031, ICC men’s hosts cycle.
It is the first global tournament to be hosted by Pakistan, since the 2009 attack on the Sri Lankan team.
The last major tournament to take place in the country was the 1996 Cricket World Cup which it cohosted with India and Sri Lanka.
United Arab Emirates was announced as a co-host due to India’s refusal to play in Pakistan. Only the matches involving India will be played in UAE.
Under the standardised hosting rights agreement between ICC and any host country like Pakistan, it is stipulated by ICC upon the host country 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 for the event not ordinarily resident in the host country shall be liable to any taxes or other deductions in the host country as a result of the event or any other ICC event or function and any of their operations.
The Pakistan Cricket Board (PCB) as the sole governing body for the game of cricket in Pakistan, has committed to grant income tax exemption to ICC under the hosting rights agreement at the time of award of Champions Trophy 2025 hosting rights on November 16, 2021, on the back of a comfort letter issued by the FBR to the PCB on September 14, 2021. This commitment was furnished in view of previously granted such income tax exemption to ICC Champions Trophy 2008 hosted in Pakistan.
The PCB’s commitment to grant this income tax exemption is not an unprecedented event.
Such exemptions were solicited by ICC before any major international tournament which were duly complied and graciously granted by the host country. Case in point is Australian government grant of income tax exemption at the time of ICC World Twenty 20, 2020.
Section 53(2) of the Income Tax Ordinance, 2001 empowers the federal government or the board with the approval of the federal minister-in-charge may, from time to time, pursuant to the approval of the Economic Coordination Committee of the Cabinet whenever circumstances exist to take immediate action for the purposes of implementation of bilateral and multilateral agreements by notification in the official Gazette, may add any income tax exemption clause in the Second Schedule to the Ordinance.
The Revenue Division has proposed that the Economic Coordination Committee of the Cabinet may grant approval for insertion of an income tax exemption clause (98AA) in Part I of the Second Schedule to the Ordinance, in terms of power conferred under section 53(2) of the Ordinance. It is pertinent to mention that this exemption will only be applicable to non-resident persons coming from abroad for this tournament.
However, all resident persons in Pakistan associated with the Champion Trophy 2025 as well as PCB will continue to pay their income tax liability on their income in connection with the said tournament. On the other hand, there will be no exemption from sales tax and FED of any kind.
The Revenue Division has emphasised that the income tax exemption to ICC cannot be really treated as an exemption since there would not have occurred a revenue loss, had this champions trophy 2025 hosting rights not been granted to Pakistan.
It is pertinent to highlight that prior approval from the IMF with respect to gazette notification giving effect to insertion of a new clause (98AA) in Part I of the Second Schedule to the Ordinance has been obtained.
In this regard, the FBR will issue a SRO to exempt income of ICC from Champions Trophy.
The proposed draft of the SRO is as follows “SRO (l)12025.- In exercise of powers conferred under sub-section (2) of section 53 of the Income Tax Ordinance, 2001 XLIL of 2001), the Board with the approval of the Federal Minister-in-charge is pleased to direct that the following further amendments shall be made in the Second Schedule to the said Ordinance, namely: -In the aforesaid Schedule, in Part I, after omitted clause (98A), the following new clause shall be added, namely: - ’(98AA) Any income derived by ICC Business Corporation (IBC) or International Cricket Council QCC) or employees, officials, agents and representatives of IBC and ICC, officials from ICC members, players, coaches, medical doctors and officials of member countries, IBC partners and media representatives, other than persons who are resident of Pakistan, from ICC
champions Trophy, 2025 hosted in Pakistan.“
Copyright Business Recorder, 2025
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