KARACHI: Tax department has been stopped by the Federal Board of Revenue (FBR) from freezing bank accounts of companies for non-compliance in projects linked to China-Pakistan Economic Corridor (CPEC).
According to an FBR official, the regulator has instructed all tax departments to not invoke provisions linked to bank attachment in cases of companies involved in transactions under CPEC projects, reported The News.
The official said any such action is dependent on prior go-ahead from Member Inland Revenue. There are serious deficiencies in monitoring of withholding tax, as majority of projects have been granted tax exemption by the government.
He said withholding tax exemption is only given via the issuance of certificate or those give through the Income Tax Ordinance (ITO) 2001. Tax departments have been monitoring withholding taxes under Section 152 and 153 (1) of ITO 2001.
China-Pakistan Economic Corridor (CPEC) was signed between the two countries in 2013, with Beijing making an initial commitment to invest $46 billion, which now has reached $63 billion. CPEC has been instrumental in reviving Pakistan’s ailing power sector besides upgradation of infrastructure to boost future economic growth.
The sources in FBR revealed monitoring is on those CPEC projects, mainly involved in banks, construction, infrastructure, power etc. The tax regulator has given exemption from duty and taxes on certain projects of CPEC.
And last week, Economic Coordination Committee (ECC) gave go-ahead for providing exemption from duties and tax for import of construction material for National Highway Authority’s infrastructure projects coming under CPEC.
