ISLAMABAD: The government has granted exemptions to Sukuk (Islamic bonds) from duty and taxes to attract the foreign buyers.
Economic Coordination Committee (ECC) of the Cabinet meeting, held under the chairmanship of Federal Finance Minister Mohammad Ishaq Dar at the Prime Minister House, also accorded approval to the proposal of the ministry of finance for the issuance of Sukuk, 2016.
The Finance Division had requested the exemption of certain taxes and duties for making the sale of the Sukuk a desirable transaction for the foreign investors.
The committee was informed that as the international rating agencies have improved the ratings of Pakistan, the current issue of the Sukuk is expected to bring in a better yield/ pricing.
The ECC exempted up to 15 per cent of income tax on the profit that the investors would enjoy by purchasing Pakistani bonds. It also waived 17 per cent alternate corporate tax, the advance income tax and the tax on dividend income. The 15 per cent tax on gross payments to non-residents on account of royalty and technical services was also waived.
Up to 12 per cent tax on payments for goods and services was also removed. It waived 0.3 per cent tax on cash withdrawals on these transactions and 0.4 per cent tax on banking transactions related to the issuance of Sukuk. Income tax on the sale and purchase of air tickets was also exempted.
The ECC drew the authority under Section 53(2) of the Income Tax Ordinance to give exemptions, according to the summary.
The meeting also considered and approved the summary presented by ministry of industries and production for the reduction in price of imported urea fertilizer lying with NFML.
The committee had earlier fixed the price of the imported urea Rs 1310/- per bag. The ECC had earlier formed a committee headed by secretary industries and production to propose steps for the enhancement of sales of the imported urea. The ECC after detailed deliberations reduced the price to Rs. 1200/- per
