ISLAMABAD (December 29 2002) : The government has announced that the coal and gas-fired power plants would continue to enjoy tax exemption under clause 132 of the Second Schedule of Income Tax Ordinance 2001, Member Income Tax, Vakeel Ahmed Khan, told Business Recorder here on Saturday.
At present, there are three types of power plants operating in the country.
These encompass oil-fired power plants, coal-fired power plants and gas-fired power plants.
Under the previous clauses of Income Tax Ordinance 1979, the exemption was available to all three types of power plants.
As the government is encouraging coal and gas fired power plants, these units would continue to avail exemption under the above-mentioned clause of the Ordinance of 2001.
Vakeel said that some quarters have wrongly created an impression that income tax exemption available to electronic power generation projects set up in Pakistan on or after July 1998 has been withdrawn through SRO 940(I)/2002 dated December 19, 2002.
In fact, it is the oil-fired power plants whose exemption has been taken away from October 22, 2002.
The gas-fired units would continue to enjoy exemption under clause 132 of the Second Schedule of the Income Tax Ordinance 2001.
Similarly, coal-fired units would also continue to avail the exemption, he added.
The notification which amended Income Tax Ordinance 2001 reads as: “In exercise of the powers conferred by sub-section (2) of the section 53 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Government is pleased to direct that the following further amendment shall be made in the Second Schedule to the aforesaid ordinance, namely:-
In the aforesaid schedule, in Part-I, in clause (132), in the first proviso, for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided further that with effect from the 22nd October, 2002, exemption under this clause shall not be available to any oil fired power plant”.