IFC seek exemption from tax on Bank Transactions

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ISLAMABAD: IFC seek exemption from tax on Bank Transactions. The World Bank group member IFC (International Finance Corporation), IFC (International Finance Corporation)’s towards Government imposed withholding tax on banking transactions and capital gains tax did the violation of the agreement and the out of sight these two taxes sought exemption.

According to the documents that are available at “Express” that IFC (International Finance Corporation)’s Finance Minister was written a letter to Ishaq Dar who is a current Federal Finance Minister of Pakistan that towards Government through finance bill of amendments to the Income Tax Ordinance, 2001, under the IFC (International Finance Corporation) has imposed tax in contract with banking transactions.

It was stated in the letter that under the Finance Act 2015, Income Tax Ordinance, 2001, includes the provision of 236 services and IFC (International Finance Corporation) under Article 100 out of sight the withholding tax on banking transactions while under the second article capital gain tax imposed in contract with capital gain.

Under the IFC (International Finance Corporation) act 1956 this is violation of article of agreement which was signed by all member countries.

Because according to article of agreement IFC (International Finance Corporation) got exemption to duty and taxes out of sight all member countries that was also gotten in connecting with Pakistan but under the Finance Act 2015 income tax provisions introduced by the IFC (International Finance Corporation) on the withholding tax and capital gains tax has been imposed by which IFC (International Finance Corporation) equity investment was badly affected in Pakistan.

It was further written in the letter that the IFC (International Finance Corporation) is the long lasting partner for the developments in Pakistan and towards IFC (International Finance Corporation) 5 billion and 60 million investment has been done by Pakistan.

It is the largest corporation which is directly served foreign investment and since 2014 to 2015, IFC (International Finance Corporation) for the Pakistan has promised and contracted 1 billion and 20 million dollars which are recorded.

It was told in the letter that Pakistan’s Energy Development in the private sector regarding the role of the IFC (International Finance Corporation) and under the new power generation policy of IFC (International Finance Corporation) Government of Pakistan is being supported to generate 4 thousand mega watts projects but under the Finance Act amendments through the Government of Pakistan to non finalized withholding tax has been imposed in contract with banking transactions.

In like manner through second amendment capital gain tax is imposed on the sale of shares while under the article of agreement IFC (International Finance Corporation) got rid of duty and taxes but through these amendments both taxes will be applicable on IFC (International Finance Corporation) while it is requested to Federal Finance Minister of Pakistan Ishaq Dar that he take a personal interest in the matter and submit intervention and get exemption from both taxes and make changes in income tax ordinance because IFC (International Finance Corporation)’s investment program in order to be able to progress.