ISLAMABAD: In a move to facilitate widows and pensioners, Finance Minister Ishaq Dar has directed the Federal Board of Revenue (FBR) to remove 10 percent income tax on profits received through two schemes of National Savings – Pensioners Benefit Account (PBA) and Behbood Savings Certificates (BSC).
The finance minister chaired a meeting to review the performance and other matters related to National Savings. At the outset the finance minister stated that it had come to his notice that an anomaly in the tax regime had resulted in taxation of yield on Behbood Certificates and Pensioners Benefits accounts.
Apparently the impact on taxation of these schemes was an unintended consequence of certain legal changes introduced in the Finance Act. He said that he has already instructed FBR to take appropriate measures to remove the anomaly.
DG Zafar Masud briefed the meeting on performance of the National Savings during the last one year.
The briefing covered the progress made in areas like financial inclusion through automation, introduction of new products and improving the customer service and outreach.
The meeting was informed that National Savings has emerged as a formidable vehicle for financial inclusion with introduction of popular welfare oriented products and registering a large number of customers of which more than 50 percent were women.
The efforts of National Savings are being actively supported by the World Bank and Karandaaz (DFID and Bill and Melinda Gates Foundation) through up-gradation of IT system, offering alternate delivery channels (cell phone, internet banking and ATM cards), Enterprise Resource Planning system (ERP), Business Intelligence, Data Warehouse, capacity building and training etc. He said that the efforts of National Savings in promoting financial inclusion have been lauded and recognized, not only nationally but also internationally. The reputed CFI magazine UK has recently bestowed on National Savings the award for “outstanding performance in promoting financial inclusion-2017”.
The award is in fact a recognition of the progress made by National Savings in the last one year on the automation front with 2/3rd of the branches having been connected online and the offering of banking clearing services to the customers.