Tax waivers for sukuk notified ISLAMABAD: The Federal Board of Revenue on Friday notified tax exemptions on sukuk (Islamic bonds) with immediate effect.
The tax exemptions were notified through three different notifications. The government estimated to raise at least $750 million through sukuk issuance on international bond market.
According to the income tax notifications, the government exempted the yield of third Pakistan sukuk from levy of income tax.
As per the notifications, income tax exemption has been granted to the income of an agency of a foreign government, a foreign national (company, firm, or association of persons) or any other non-resident person, from profit on money borrowed in respect of Pakistan International Sukuk 2016 issued by the Third Pakistan International Sukuk Company Limited.
Through another notification, the government exempted the capital value tax on Third Pakistan International Sukuk Company Limited.
The Economic Coordination Committee (ECC) of the cabinet had already approved the tax exemptions on the Islamic bonds. The main beneficiaries of the decision will be local and foreign investors and a consortium of financial advisers, comprising five banks, hired to manage the transaction.