LAHORE: All the leading political parties, except two unknown, have been found unregistered with the Federal Board of Revenue (FBR), apparently hiding the source of income/ funding and evading income tax.
One was registered with the Regional Taxpayers Office (RTO), Rawalpindi, in August 2016 and the other with RTO Corporate, (Lahore), in February 2016. The FBR has instructed all the Large Taxpayer Units (LTUs) and Regional Taxpayer Units (RTUs) to issue notices to the heads of the parties to ensure income tax return filing.
According to an internal circular issued by the FBR headquarters to the field formations, only two parties -- Front National - Pakistanand Pakistan Freedom Movement --- are registered with the Board. All other parties including ruling Pakistan Muslim League – Nawaz (PML-N), Pakistan Peoples Party (PPP), Pakistan Tehreek-e-Insaf (PTI), Awami National Party (ANP), Balochistan National Party (BNP), Jamaat-e-Islami (JI) Pakistan, Jamiat Ulama-e-Islam (F). Majlis Wahdat-e-Muslimeen Pakistan (MWMP), Mohajir Qaumi Movement-Pakistan (MQM), Muttahida Qaumi Movement Pakistan (MQM), Pakistan Awami Tehreek, Pakistan Muslim League (PML), PML-F, PML-J, PML-Z, PPP-Shaheed Bhutto, Pakistan Peoples Party Parliamentarian (PPPP), PTI-N, and others were unregistered with any of the tax office of the FBR in Pakistan.
An FBR official said that if the parties failed to register the LTUs and RTUs concerned, the FBR will ask the Election Commission of Pakistan to act.
The official said the political parties are not exempted from income tax. So these parties have to declare their income, source of income and pay the due taxes. He said the parties can apply for the status of Non Profit Organization (NPO) to get the tax exemption, but first they would have to register with the FBR.
Earlier, aproposal was tabled for income tax exemption to political parties through Finance Bill 2017, by adding a new clause 143 to Second Schedule of Income Tax Ordinance, 2001, which allowed exemption from income tax to: “Any income derived by a political party registered under the Political Parties Order, 2002 with the Election Commission of Pakistan.” However, this proposal was turned down and did not become part of the Finance Act 2017.
The FBR sources said the filling of the tax returns will also provide parties' source of income and will resolve the issue of foreign funding in Pakistan politics, they said.
They said it will also helpthe Election Commission of Pakistan (ECP) settle issues about the electioneering spending and the income of the party for the next elections. The difference between the income and spending will reveal the other sources used by the parties for the election. Besides, it will also put the parties under the radar of the FBR and other institutions concerned to investigate the sources of funding of the party.
A spokesperson of the FBR said that the political parties were not exempted from income tax. To a question about the the objectiveof the FBR initiative, he said he will check it next week.
Ayub Nasir adds from Islamabad: PML-N Chairman Senator Zafrul Haq said the parties are registered with the ECP which is provided parties complete financial details including the account number. He said he had not recieved any notice or reminder from the FBR for registration. If the registration with the FBR is legally required, the PML-N being the ruling party would register itself with the FBR without any delay. He said he would get the information from the FBR on Monday through a lawyer.
PPP spokesperson Amir Fida Piracha said registration with FBR was not legally required, adding the PPP fulfils all requirements determined by the ECP.
Advocate Saifullah Gondal, who oversees JI's parliamentary affairs, said his party regularly submits its accounts/assets details to the ECP. A party is registered with the ECP, not the FBR,he said. The ECP may share the financial information with the FBR, he added.