ISLAMABAD, May 6: The government on Monday announced that it was considering eliminating a number of income tax exemptions effective from July 1, 2002.

A spokesman for the Finance Ministry in a press statement said the government was planning to withdraw a number of IT exemptions in the forthcoming budget.

The spokesman, however, said that IT exemptions would remain intact on pension, cost of living allowance availed by the employees of private and public sectors, travelling allowance, medical expenses, income from mutual funds and modarabas.

It may be added that the IMF has asked the government for elimination of at least 55 IT exemptions in the budget for releasing the next tranche of PRGF.

Pakistan in a letter of intent (LoI) had agreed with the Fund to abolish at least 55 IT exemptions mentioned by the committee to revise income tax (policy and) ordinance (CRITO) in its report.

The CRITO in its report had recommended to the government for withdrawal of at least 70 IT exemptions. Of these some exemptions were withdrawn in the last year budget.

The report proposed IT exemptions from salary; pension; annuity; provident fund/gratuity; entertainment allowance; other allowances to defence forces; president, governors, ministers; judges; donations/contributions; non-residents; national savings; foreign currency; banks; securities; boards; donations; medical expenditure; education fee and income of organizations.