LAHORE: The Pakistan Civil Society Forum (PCSF) has rejected the new taxes levied on the nonprofit organisations (NPOs) in the Finance Bill 2018, terming them unreasonable.
In a press conference at the Lahore Press Club on Friday, the civil society activists told the media about the issue of the new taxes and their repercussions.
“We term them unreasonable taxes,” said Muhammad Tahseen, convener of the PCSF.
“We are already paying 30pc tax and now more rigorous taxes have been imposed on us, almost suffocating the nonprofit organisations.”
According to the new taxes, Tahseen said, the total was coming up to around 45pc tax – the same level of taxation as the government levied on multinational corporations.
“We are doing welfare work, not making profits,” he said. “Everyone should be taxed but the way they are taxing us seems to be making us a target.”
He complained that there were several examples of political parties and other profit-based business where tax was not collected in the same way.
“Why don’t they ask where the money for so many political parties is coming from? Yet despite being registered and above board, we are still asked these questions.”
The civil society organsations present also objected to Clause No 83 of the Finance Bill which clearly states that if the NPOs do not spend more than 75pc of their income on charitable and welfare activities, they would lose the NPO status and their entire income would be taxed at 30pc. Moreover, the bill states that if the NPOs are unable to spend more than 75pc of their income on charitable and welfare activities, the amount not spent shall be taxed at the rate of 10pc to let their status as ‘nonprofit organisation’ remain intact. There is also a limit of 15pc on administrative and management expenses.
Tahseen said it was no one’s business how any organisation managed its expenditure and putting a 15pc limit on administration expenses meant that the government was interfering in its internal matters.
Tanveer Jahan said whenever the civil society organisations helped brought democracy, all the parties would side with them but they forgot who their friends and enemies were once they were in the assemblies.
Bushra Khaliq said the small organisations would be the ones suffering most as a result of this bill. These would include organisations which worked at the grassroots, including those working on public health issues and the minorities rights.
“Such rigorous taxation would negatively affect the workings of these NGOs and their outreach.”
Bushra said 15pc admin cost would end up in making it difficult for the NGOs to employ the services of professionals and experts.
The bill has not been approved by the Senate yet and the activists expressed hope that the government would make some amendments to it after discussions with the NPOs. They said the government should respect the autonomy of the NPOs and create an environment for them to work freely rather than targeting and suffocating them.
Published in Dawn, June 17th, 2017