ISLAMABAD: The Ministry of Foreign Affairs has approached the Federal Board of Revenue (FBR) against the discontinuation of the value-added tax (VAT) exemption facility available on purchases and services of the Embassy of Pakistan in Baku, Azerbaijan.

According to a letter of the Ministry of Foreign Affairs to the chairman FBR, on the pretext that the FBR (Pakistan) is not allowing the tax exemption facility to the Embassy of Azerbaijan in Islamabad, the Ministry of Foreign Affairs of Azerbaijan by invoking the principle of reciprocity, has withdrawn the facility of the VAT refund on all purchases and services to Pakistan's mission in Baku.

Azerbaijan's decision of refusing VAT exemption would have serious financial repercussions for Pakistan's mission and that too in foreign exchange i.e. additional burden of 18 percent on rents, school fee, and other purchases.

Copyright Business Recorder, 2021