The Federal Board of Revenue (FBR) will move a summary to the federal cabinet to seek restoration of the sales tax exemption for diplomats, diplomatic missions, and privileged persons.
Top FBR officials told ProPakistani that through the Tax Laws (4th Amendment) Ordinance, 2021, FBR had imposed sales tax on the imports made by foreign diplomatic missions and United Nations agencies.
Under the said mini-budget, the sales tax exemption was withdrawn on the goods imported by various agencies of the United Nations, diplomats, diplomatic missions, privileged persons, and privileged organizations, which are covered under various Acts and, Orders, rules, and regulations made thereunder; and agreements by the federal government provided that such goods are charged zero-rate of customs duty under Customs Act, 1969, and the conditions laid therein.
Later on February 4, 2022, FBR issued instructions to the field formations that on the request made by the Ministry of Foreign Affairs, the issue of tax exemption on imports by diplomats, diplomatic missions, and other privileged persons has been reviewed and consequently sales tax shall not be collected on such imports covered under PCT headings 99.01, 99.02 and 99.06 of Chapter 99 of the First Schedule to the Customs Act, 1969, FBR added.
To give legal cover to the said instructions, FBR is moving a summary to the cabinet to restore the sales tax exemption to diplomats, diplomatic missions, and privileged persons.
Due to the current political situation, the next cabinet meeting has not been scheduled yet. However, the tax officials have done their paperwork to give legal backing to the sales tax exemption to diplomats, diplomatic missions, and privileged persons, officials added.
