The Pakistan Cricket Board (PCB) has requested the Federal Board of Revenue (FBR) to restore income tax exemption, through an amendment in the Second Schedule of the Income Tax Ordinance 2001. In this connection, the Board has received a formal request from the PCB for restoration of the exemption. Sources told Business Recorder here on Monday that the income tax exemption of the PCB was withdrawn a few years ago along with many other exemptions.
Under the Second Schedule of the Ordinance 2001, it is available to any income derived by any Board or other organisation established in Pakistan for the purpose of controlling, regulating or encouraging major games and sports recognised by the government, provided the exemption clause shall not be applicable to the Pakistan Cricket Board.
It is important to mention that following withdrawal of sales tax exemptions under the 'reformed general sales tax' (RGST), the FBR has also decided to withdraw all redundant and unnecessary income tax exemptions under the Second Schedule of the Income Tax Ordinance 2001.
Sources said that the income tax exemptions have comparatively less revenue implications compared to sales tax exemptions and zero-rating. Therefore, there is no need to immediately withdraw income tax exemptions. Contrary to this, all redundant exemptions would be withdrawn in the next budget for which exercise has been started to review all exemptions under the Second Schedule of the Income Tax Ordinance 2001.
According to sources, the Board is reviewing the existing list of income tax exemptions to amend the Second Schedule of the Income Tax Ordinance 2001. The Second Schedule of the Income Tax Ordinance 2001 contains a number of income tax exemptions. Under the income tax reforms, the FBR is examining withdrawal of these exemptions even for non-governmental organisations and other sectors/entities for broadening the tax base.