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Govt withdraws income tax exemption given to political parties

Govt withdraws income tax exemption given to political parties

KARACHI: The federal government has withdrawn income tax exemption given to political parties after severe criticism from various quarters.

The government through the Finance Bill 2017 proposed clause 143 to the Second Schedule of the Income Tax Ordinance, 2001, whereby any income derived by a political party was exempted with the condition that it is registered under the Political Parties Order, 2001 with the Election Commission of Pakistan.

However, this provision was not approved by the parliament; thus, it was not incorporated in the Finance Act, 2017. Tax analysts have criticised the proposed changes, giving immunity to the political parties, saying it would become a parking lot for black and undocumented economy.