To lure foreign investment, PTI government launches an unprecedented initiative
ISLAMABAD -To lure foreign investment, PTI government launches an unprecedented initiative.
Imran Khan government has decided to waive income tax and duties for those investing in eurobonds and sukuk as per its medium-term note programme (MTN).
The finance ministry has already sent a summary to the government for the exemptions citing that the Income Tax Ordinance 2001 had a provision for it in its schedule II, Gulf Times has reported.
As per clause 75 of the schedule, any international government institution, private company, firm, association of persons or resident could be given tax exemption on income or interest against any loan agreement, foreign currency instrument, government scheme or treasury receipts. However, as per the Rules of Business 1973, the federal government must be served with a formal request for the exemptions.
After the federal government’s approval, the Federal Board of Revenue (FBR) will issue a formal notification for the exemptions permitted, according to finance ministry sources.
The waiver in income tax and duties on sovereign bonds is given to attract capital from the international financial market. As per the summary, previous governments had also exempted income tax on eurobonds and sukuk.
According to finance ministry’s spokesperson Umar Hameed, the finance division completed the shortlisting of transaction advisers for its one-year eurobonds and sukuk under the MTN programme on October 18.
The biddings were invited until October and after scrutiny of the applications, the finance division appointed seven international advisers for its sovereign bonds.