The Federal Board of Revenue (FBR) has announced that it extended approximately Rs 60 billion in tax relief on a variety of imported goods during the current fiscal year. This tax break was implemented through reduced income tax rates under Clause 56 of Part IV of the Second Schedule of the Income Tax Ordinance, 2001.
According to the FBR’s recent annual tax expenditure report, this measure aims to support key sectors of the national economy and ease the financial burden on important industries. The FBR clarified that the standard withholding tax under Section 148 is waived for specific individuals, organizations, and categories of goods imported into Pakistan.
The FBR provided a detailed list of the entities and import categories that qualify for this tax incentive:
- Goods falling under Chapters 86 and 99 of the Pakistan Customs Tariff (excluding PCT heading 9918).
- Petroleum products, including crude oil, furnace oil, motor spirit, JP-1, high-speed diesel oil, base oil for lubricants, light diesel oil, and super kerosene oil, imported by major oil marketing companies licensed by the Oil and Gas Regulatory Authority (OGRA), as well as oil refineries.
- Goods imported by direct and indirect exporters under specific regulations (subchapter 7 of Chapter XII of SRO 450(I)/2001).
- Temporarily imported goods exempt from customs duty and sales tax under specific regulations (SRO 492(I)/2009), such as items brought in by international athletes.
- Imports under Manufacturing Bond Schemes as outlined in the Customs Rules 2001.
- Mineral oil imported by pesticide manufacturers, as per specific regulations (SRO 857(I)/2008).
- Imports by the Federal Government, provincial governments, and local governments.
- Foreign companies and their associations where a majority stake is held by a foreign government.
- Imports of plant and machinery by contractors working on government projects, subject to official certification.
- Petroleum companies importing crude oil, diesel, kerosene, and chemicals used in refining processes.
- Exploration and Production (E&P) companies under specific regulations (SRO 678(I)/2004), excluding imported motor vehicles.
- Re-imported Pakistani goods that were previously exported, within one year of their export, as per the Customs Act, 1969.
- Plant and machinery for power generation projects using biomass or bagasse that meet specific criteria (Clause 132C).
- Entities authorized under the Export Facilitation Scheme 2021, subject to conditions set by the FBR.
- Completely built-up (CBU) motor vehicles with an engine capacity of up to 1000cc.
- Printed books (PCT code 49.01), excluding brochures and similar materials.
- Newspapers, journals, and periodicals (PCT code 49.02), whether containing advertisements or not.
- Blind talking mobile phones imported by visually impaired individuals under relevant regulations.
The FBR stated that this facilitation aims to enhance trade competitiveness and encourage industrial productivity by ensuring that essential imports are not burdened by excessively high tax costs. These concessions also support broader efforts to strengthen the export sector, develop domestic industries, and improve energy infrastructure.
The decision to offer reduced income tax rates on selected imports is part of a larger strategy to stimulate economic growth, attract investment, and provide support to important sectors. The FBR reiterated its commitment to modernizing Pakistan’s tax system while ensuring that imports crucial for national development receive the necessary fiscal support.
Through this Rs 60 billion in tax concessions, the FBR continues to play a key role in balancing revenue collection with strategic tax incentives, working to ensure that the country’s tax system supports growth and inclusivity across vital sectors.
