The government has decided to end the income tax exemption of Rs 140 billion on the condition of the International Monetary Fund (IMF).

As per details, the federal government will bring in an ordinance to meet the IMF requirement, which will eliminate income tax exemption of up to Rs 140 billion for various sectors.

The procedure for bringing the Presidential Ordinance has been completed and the approval of the Ordinance has been sought from the Federal Cabinet through a summary circulation.

Under the said ordinance called Tax Laws (Second Amendment) Ordinance, 2021 some 76 corporate income tax exemptions will be withdrawn.

The Tax Laws (Second Amendment) Ordinance, 2021 would amend Sales Tax Act 1990 and Income Tax Ordinance 2001. Following its signing by the President, the Ordinance will come into force at once. Once the Ordinance is being tabled before the National Assembly, an amendment would be introduced to change the date for withdrawal of income tax exemptions from July 1, 2021, officials said.

Through the Tax Laws (Second Amendment) Ordinance, 2021, the corporate income tax exemptions would be withdrawn and replaced with the tax credit regime. Tax credit facility has been extended to industrial undertakings; charitable organizations and IT export services under the Ordinance.