NPCs only for NRPs

KARACHI: The Federal Board of Revenue (FBR) has clarified that only non-resident Pakistanis can purchase Naya Pakistan Certificate and can avail tax benefit.

“Only non-resident individuals can purchase a Naya Pakistan Certificate who maintains a bank account abroad or foreign currency account maintained in Pakistan. It is also clarified that such individuals are not required to file returns of income,” the FBR said in its clarification.

The FBR clarification is in contrast with the explanation of the State Bank of Pakistan (SBP) regarding investment in NPC. “Resident Pakistanis who have declared assets abroad with FBR can invest in USD-denominated NPCs,” the SBP added.

The FBR issued an explanation on profit derived by non-resident persons.

The FBR clarified that Naya Pakistan Certificate, a new instrument launched by the government / State Bank of Pakistan, qualifies as a debt instrument in terms of Clause (5AA) of Part-II of the Second Schedule of the Income Tax Ordinance, 2001.

Therefore, profit on debt on the Naya Pakistan Certificate is subject to tax at 10 percent, which is final tax.