Islamabad, Pakistan:The government has announced plans to repeal the remaining income tax exemptions for donations and non-profit organizations in the Second Schedule of the Income Tax Ordinance (ITO).
As part of its efforts to modernize the tax system, the government will also introduce a single turnover-based registration threshold for all businesses by FY27. Businesses exceeding this threshold will be required to register for both income tax and sales tax.
These exemptions will be replaced with tax credits to simplify the tax system and broaden the tax base. The government aims to complete this reform within the next three years. Pro Pakistani
Additionally, the government plans to streamline the Goods and Services Tax (GST) by introducing a unified reduced rate and transitioning to a broad-based VAT system.
These reforms are part of the government’s commitment to improving tax efficiency and increasing revenue collection.