ISLAMABAD (May 08 2003) : The Central Board of Revenue (CBR) has decided to withdraw certain additional income tax exemptions specified in the Committee on Review of Income Tax Ordinance (CRITO) list, says a CBR report issued here on Wednesday.
Section 53 of Income Tax Ordinance, 2001 empowers the Federal Government to exempt from tax any income or classes of income, or person.
Tax exemptions are granted under restrictive set of conditions but take many shapes with far-reaching revenue implications.
In certain cases, these are granted to promote investment, exports and growth; in other cases privileged personalities are entitled to such exemptions, or they are allowed to vulnerable groups to preserve equity in the tax system (essentially tax expenditure).
The report stated that some of these exemptions are time-bound, ie, they lapse after the due date unless renewed further or they have no expiry date and their termination (or continuation) depends on the design of tax policy being pursued.
With the passage of time, the list of exemptions had inflated to include tax rebates, concessions and non-standard exemptions.
This problem is being addressed through a conscious effort that includes withdrawal of all such exemptions whose relevance has become hard to justify.
The most recent example in this respect is the withdrawal of 51 exemptions of the Second Schedule and four rebates available under the First Schedule in the Federal Budget of financial year 2002-03.
The process is expected to continue in future as well, when some of the additional exemptions stated in the CRITO-list will be withdrawn, presumably in the coming budget, the report added.