ISLAMABAD: The Federal Board of Revenue (FBR) has decided to grant income tax exemption to the National Power Parks Management Company Ltd (NPPMCL) after its privatisation.
Sources told Business Recorder here on Monday that the FBR has informed the status of exemption of the NPPMCL before the last meeting of the committee constituted by the Cabinet Committee on Privatisation (CCoP).
The FBR has agreed to grant income tax exemption to the NPPMCL, upon its privatisation, under clause 132 of the Income Tax Ordinance 2001. The matter is under consideration.
The issue of tax credit availed by the company under section 65 (d) of the Income Tax Ordinance 2001 was also discussed, and it was agreed that the tax exemption to the NPPMCL under clause 132 of the Income Tax Ordinance 2001 will be granted with retrospective effect to resolve the issue.
Under the income tax law, the income tax exemption is available to the profits and gains derived by a taxpayer from an electric power generation project set up in Pakistan on or after the 1st day of July, 1988.
The exemption under this clause shall apply to such project which is owned and managed by a company formed for operating the said project and registered under the Companies Ordinance, 1984 and having its registered office in Pakistan and project not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business.
The exemption under this clause shall apply to such project owned by a company 50 per cent of whose shares are not held by the federal government or provincial government or a local government or which is not controlled by the federal government or a provincial government or a local government.
Copyright Business Recorder, 2021