05 June 2004	Saturday	16 Rabi-us-Saani 1425

ISLAMABAD, June 4: The government is considering a proposal to withdraw around 10 income tax exemptions in the upcoming budget, informed sources told Dawn on Friday.

The income tax exemptions will be selected from the list of the Committee to Revise the Income Tax Ordinance (CRITO) following seeking views and suggestions of the relevant stakeholders.

The sources said that the tax authorities would discuss the sectors with Finance Minister Shaukat Aziz for withdrawal of the income tax exemption on them from the next fiscal year. The tax authorities would finalize the exact numbers of exemptions for withdrawal in the next week meeting with finance ministry senior officials.

The government had already withdrawn 75 income tax exemptions from the CRITO list during the last two years under the commitment with the International Monetary Fund (IMF) for releasing the tranche of Poverty Reduction and Growth Facility (PRGF).

According to the sources, the IMF has again this year proposed to the government to withdraw income tax exemptions in the range of between 5-10 from the next fiscal year. Withdrawal of these exemptions will be announced through the Finance Bill 2004-05, the sources added.

However, the sources said this will have a lesser revenue effect on the taxpayers. Currently, the total number of income tax exemptions in the Income Tax Ordinance 2001 stood at 167, which are available to salaried class, businessmen, charitable association and educational institutions etc. Of these 40 exemptions are only available to salaried class.

The CRITO in its report had recommended to the government for withdrawal of more than 80 IT exemptions. Of these 75 had already been withdrawn in the last two years. Central Board of Revenue (CBR) chairman M. Abdullah Yousuf in his first press conference announced that the government was committed to withdraw all tax exemptions.