government on Tuesday remained evasive of restoration of exemption from income tax for Pakistani diplomats posted overseas with his hands tied by the International Monetary Fund (IMF) as Foreign Minister Bilawal Bhutto Zardari feared the tax could “paralyze” his ministry.
Foreign minister also called the Ministry of Finance decision exclude the diplomatic service of Pakistan from 150% executive allowance as “discriminatory and outside of any logic”. Finance Minister Miftah Ismail and Foreign Minister Bilawal met in block Q to find a solution, but their meeting was fruitless.
” issue of restoration of income tax relief for Pakistani diplomats posted take abroad up with the IMF, as government can’t do it without consent of IMF,” said Dr. Aisha Pasha, Minister of State for Finance. At this time she added a revival of the IMF program was in higher national interest.
A fact sheet from the Ministry of Finance issued after the meeting states that “various financial matters related to Pakistani representations abroad and the ministry of foreign affairs also discussed during the meeting” between Bilawal and Miftah, which was also attended minister of state.
in new budget, government withdrew income tax relief on payment of any allowance or benefit paid or permitted to Pakistani workers posted abroad. Annual cost of the exemption is 1.035 billion rupees. in fiscal year 2022 according to the Federal Council of Income (FBR).
“The introduction of this tax is tantamount to actually paralyzing the leading institution. of state, foreign minister wrote in prime minister. Bilawal said it was amazing that instead of granting a much needed upward revision of allowances, a tax was introduced, significantly reduced even current level of these allowances.
Pakistani employees posted get abroad various allowances and benefits for house rent, tuition fees and other purposes. Before the budget, these allowances were exempt from income tax. But under the deal with the IMF, these allowances were made part of taxable income.
Bilawal asked for immediate suspension of implementation of tax on allowances and allowances for employees posted abroad and revision of memorandum of June 19, 2022 on service allowance for officials of Ministry of Foreign Affairs.
According to officialPrime Minister Shehbaz Sharif set up committee that will decision on exemption from income tax and administrative allowance. FBR Chairman Asim Ahmed also was made member of Committee.
“Finance minister acknowledged the importance and contribution of foreign missions abroad and assured foreign minister of addressing them financial issues through appropriate procedures and instructed the relevant authorities to expedite the process for resolution of on these issues,” the Ministry of Finance said in a statement.
“For first since 1947, income tax was introduced on allowances and benefits of all officers and officials posted in Pakistan missions on board in Finance Act 2022 parliament on June 30,” Bilawal wrote to Prime Minister Shehbaz. last a week.
He also stated that the taxation of allowances and privileges intended for ensure “financial solvency of our diplomats and their representative status will shift the focus of our personnel abroad” from work to survival.
Foreign minister wrote that the tax would equally affect officers, officials of ministries of trade, information, overseas Pakistanis, Bureau of Intelligence, Federal Investigation Agency, Inter-Services Intelligence (ISI) and armed forces serving in various countries.
“Overlay of this tax is runs contrary to the meaning of existence of these allowances, i.e., allowing them to satisfy cost of life in their respective stations of duty effectively and resolutely protect and promote the Pakistani national interests,” Bilaval said.
Bilawal pointed out out that the officers of diplomatic service of Pakistan serves in Pakistan was excluded from the executive allowance. This exception he added was “pretty much discriminatory and outside of any logic as well as the principles of justice and justice.”
The Ministry of Finance “distorted decision of June 10, turning it into discriminatory measure that was clearly not the goal of cabinet, taking decision on Executive Allowance”, according to the foreign minister.
Last week, government notified discriminatory 150% manager’s bonus for bureaucrats serving in Secretariat of the President, Office of the Prime Minister and Federal Secretariat, with the exception of many other officials also serve under one roof.
The Express Tribune reported that the notice was very discriminatory and was prone to judgment challenges in in addition to raising questions about its timing, as the country was going through difficult economic times.