NPOs criticize government for proposed tax on their surplus funds

Islamabad – The non-profit organisations (NPOs) have voiced their concerns over proposed imposition of income tax on the organisations on their surplus restricted funds by the government through the Finance Bill 2017-18. In a joint declaration issued here through the platform of Pakistan Development Alliance (PDA), NPOs voiced their concern and demanded to withdraw any such proposal, describing it as “unwarranted and unjustifiable.”

The federal government, under Section 100 C of the Finance Bill 2017, has proposed income tax at 10 per cent for NPOs on surplus restricted funds. In case the administrative expenses exceed 15 per cent of the total receipts, NPOs would not qualify for tax credit under this section.

The National Coordinator of PDA Zia Ur Rehman said that such move does not appear to be in line to promote NPOs activities and programs, which otherwise provide relief to marginalised segments of the society. The declaration says, “The imposition of income tax on the surplus restricted funds of NPOs is nothing but is tantamount to discourage these (NPOs) in their welfare cause and may hamper their performance to some extent.”

Zia further said that NPOs, through their programs, are partners of the government and its subsidiary organisations in implementation of their policies and plans in different vital social sectors, and thus help them achieve certain national and international targets, mainly those related to the Sustainable Development Goals (SDGs). There’s also no denying the fact that the role of some of the NPOs is acclaimed at the highest national and international level.

Under the given circumstances, NPOs demanded from the federal government to withdraw proposed imposition of income tax on surplus restricted funds to help them work for welfare of ordinary citizens.

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