Tax exemptions granted to over 50 entities, including former president’s pension, Fauji Foundation, Army Welfare Trust

The Finance Bill 2025-26, approved by parliament, includes a provision for over 50 tax exemptions impacting several organizations. The bill will become an Act upon receiving assent from President Asif Ali Zardari today [Monday], according to a news report.  

Tax exemptions apply to corporatised entities of WAPDA from the date of their creation until the completion of the corporatisation process. Other organizations benefiting from the exemptions include the Prime Minister’s Special Fund for victims of terrorism, the Chief Minister’s (Punjab) Relief Fund for Internally Displaced Persons (IDPs) of NWFP, National Disaster Risk Management Fund, the Supreme Court of Pakistan – Diamer Bhasha & Mohmand Dams Fund, the Prime Minister’s COVID-19 Pandemic Relief Fund-2020, National Endowment Scholarship for Talent (NEST). 

The Securities and Exchange Commission of Pakistan, Privatisation Commission of Pakistan, Fauji Foundation, Audit Oversight Board, Supreme Court Water Conservation Account, Balochistan Education Endowment Fund (BEEF), Army Welfare Trust, and Public Private Partnership Authority are also included in the list.

The bill also extends exemptions to institutions such as Shaheed Mohtarma Benazir Bhutto Institute of Trauma, Karachi, National Memorial Bab-e-Pakistan Trust, Pakistan Poverty Alleviation Fund, National Rural Support Programme, Karandaaz Pakistan (from tax year 2015 onwards), institutions of the Agha Khan Development Network (Pakistan), International Finance Corporation, Asian Infrastructure Investment Bank, Saarc Energy Centre, and the Asian Development Bank.

Additionally, the International Islamic Trade Finance Corporation, Islamic Corporation for Development of Private Sector, ECO Trade and Development Bank, and the Islamic Chamber of Commerce and Industry under the Organization of Islamic Conference (OIC) will also benefit from the exemptions.

Among the key exemptions granted, the pension of a former president and his widow will be tax-free, as well as several government entities, including the State Bank of Pakistan, State Bank of Pakistan Banking Services Corporation, Federal Board of Revenue Foundation, Pakistan Council of Scientific and Industrial Research, Pakistan Water and Power Development Authority (WAPDA), and the Pakistan Agricultural Research Council.

The Commission on Science and Technology for Sustainable Development in the South (COMSATS), Saarc Arbitration Council (SARCO), International Parliamentarians’ Congress, and Army Officers Benevolent Fund/Benevolent Fund/Bereaved Family Scheme are also included in the exemption list. 

The clause for Army Officers Benevolent Fund will apply to any monetary award received by a sportsperson winning a medal in international Olympic Games representing Pakistan, applicable from tax year 2025.

This new provision reflects the government’s ongoing effort to support charitable, educational, and development organizations while ensuring fiscal sustainability. Previously, the Federal Board of Revenue (FBR) had introduced tax credits for charitable and non-profit organizations, but the new bill extends these benefits by providing tax exemptions.