The Federal Board of Revenue (FBR) has outrightly rejected a proposal of the Pakistan Cricket Board (PCB) seeking income tax exemption, as the government wants to curtail tax concessions and exemptions for raising tax-to-GDP ratio.
Sources told Business Recorder here on Tuesday that the FBR has taken the decision in line with the practice of best tax administrations where the relevant cricket boards are taxable under the respective laws. The cricket boards of UK, India and other tax administrations are taxable and there is no justification to grant such exemption to the PCB, keeping in view best international practices.
"If we analyse the data of best tax administrations, it is evident that the cricket boards are taxable across the world without any special treatment. Similarly, if any kind of exemption has been granted to some football club it has nothing to do with the cricket board".
Secondly, the FBR is not in favour of granting exemptions, which were already withdrawn from the Second Schedule of the Income Tax Ordinance 2001. The list of exemptions under the Second Schedule of the Ordinance 2001 would be curtailed. The income tax exemption of the PCB was withdrawn a few years ago along with many other exemptions.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, income tax exemption is available to any income derived by any Board or other organisation established in Pakistan for the purposes of controlling, regulating or encouraging major games and sports recognised by the government. The exemption shall not be applicable in case of Pakistan Cricket Board.
Sources said that if the government is ready to grant exemption to the board, the FBR is ready to implement the decision. However, the FBR cannot restore exemption of the PCB on its own. In this connection, the Prime Minister Secretariat would have to be informed about government policy of not granting new exemptions.
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