KARACHI: Mian Nasser Hyatt Magoo, President Federation of Pakistan Chambers of Commerce and Industry said that under the prevailing difficult circumstances due to the third wave of covid-19, deletion of tax exemptions available to the NBFI and Modaraba that are struggling for their survivals will badly affect their efforts.
He was referring to the bill submitted by the Federal Board of Revenue to the National Assembly Secretariat suggesting amendments in the Income Tax for withdrawal of tax exemptions available under clause 100 of Second Schedule of Income Tax Ordinance, 2001 to the NBFI and Modaraba. The tax exemption as provided in Section 37 of the Modaraba Companies and Modaraba (Floatation and Control), Ordinance 1980. He further informed that NBFI and Modaraba Sector have vast outreach, facilitating SMEs where the commercial sector seems weak. While the incentives and various concessionary schemes of SBP are available to other sectors, the NBFI and Modaraba sector may not receive them being regulated by SECP. He said that the NBFI and Modaraba Association also opposing proposed amendments in the Second Schedule of Income Tax Ordinance 2001. The amendment will not bring any upward change in the revenue collection but will disturb the services and development of this sector.
President FPCCI said the exemptions available to Modaraba Sector were granted through the law for which this sector is opposing and may not be changed or overridden by any subsequent Finance Bill.
He informed that at present, in the country nearly 26 Modaraba, other than one manufacturing Modaraba is operational with equity of about Rs.20 billion and assets base of over Rs.40 billion facilitating nearly 90,000 small and medium shareholders.
Mian Nasser Hyatt Magoo President FPCCI said that the proposed withdrawal of tax exemption of clause 100 will damage the progress of NBFIs and Modaraba sectors which are facilitating and serving small and medium-size investors and promotion of Islamic Finance in the country.