Income Tax Exemptions in Pakistan

In The name Of Allah The Most Merciful &038 The Most openhearted Assignment of Principle &038 Practice Income evaluate Topic Need of value freedom pic Question What is the need of levy Exemption or Tax Concession in income revenue enhancement from government point of view? And Does put in income tax franchise policy of Pakistan effective in achieving its objectives give comments? levy EXEMPTION According To Community upbeat theoristsTax- immunity contributes to pluralism by providing the public goods and function that either argon undersupplied by the private market or by the government or else not permitd in the same socially preferable manner NEED OF TAX EXEMPTION Tax Exemption is provided for various purposes discussed below which be ? To Promote sparing bodily function ? To Provide Benefit to society ? To Provide Corporate Welf be ? To draw out Businesses ? To Promote Organizations ? To make headway Religious Activities ? To gain Economic Activities ? To Encou rage Retirement-Led Investment ? To Promote Economic activityTax exemptions are usually meant to either reduce the tax burden on a particular segment of society in the interests of fairness or to promote some type of economic activity through reducing the tax burden on those organizations or individuals who are involved in that activity. ? To Provide Benefit To Society Tax Exemptions are accorded to certain organizations because they provide a benefit to society which the government is unable(p) or unwilling to provide. ? To Provide Corporate Welfare Tax Exemption to specific businesses much(prenominal) as Big Oil is for corporate welfare. To Attract Businesses Exemption from property tax and early(a) local tax is use as a tool for attracting business to areas suffering from economic subject turn or depression. ? To Promote Organizations Tax Exemption is provided to individuals and organizations to promote economically. ? To Encourage Religious Activities Tax exemption is provi ded to encourage certain social and apparitional activities. ? To Encourage Economic Activities Tax exemption is provided to encourage certain economic activities. ? To Encourage Retirement-Led InvestmentTax Exemption is provided on amount of bequest or commutation of person to encourage retirement-led assignment fundss. COMMENTS Ignoring all other factors and evince particularly on tax exemption we can comment that, ? Tax exemption has promoted land sector. Tax is not applied on income generated up to Rs. 80,000, income exceeding from R. s 80,000 will b taxed. The total number of such farmer assesses is reported to be only(prenominal) about 20,000 in the sinless country with an average of no more than 200 such agriculture income tax payers per district.Thus tax exemption provides relief to people engaged in tax exemption. ? Tax exemption has promoted scholarships in the country as the ratio of scholarships have increased from last decades which is providing opportunities to many students to not only study in Pakistan but also abroad. Tax exemption from scholarships is good for both students and country. ? Tax exemption has promoted immense unusual investment in Pakistan as China has started many projects in Pakistan not only because of low-cost labor but also because of tax exemption. Similarly many other foreign projects are practicing in Pakistan. Tax exemption has promoted many investment banks as Modarba, macro finance bank, national investment trust etc which provide many easy loans to people and firms which in turn contribute in promoting society. ? Tax exemption policy has promoted many sectors as businesses, educational sector, foreign investment, NGOS etc Thus, We can conclude that present tax exemption policy is providing many incentives to people, starting new businesses and is encouraging people to invest more and more in various sectors which in turn are generating income to the economy.It is because of tax exemption that many projects have started in special industrial zones in Pakistan as Export processing zone, North Western industrial zone, Eastern Western Industrial zone and many more. Tax exemption policy in many areas as income earned from foreign enterprise, swell gain by foreign institutional investor, income from transport businesses has widened the approach of business. So present income tax exemption policy of Pakistan is effective in achieving its objectives. pic