The Federal Board of Revenue (FBR) will submit a report to the federal cabinet requesting that diplomats, diplomatic missions, and privileged individuals regain their sales tax exemption.
According to senior FBR officials, the FBR levied sales tax on purchases made by foreign diplomatic missions and United Nations organizations under the Tax Laws (4th Amendment) Ordinance, 2021.
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The said mini-budget eliminated the sales tax exemption on goods imported by various United Nations agencies, diplomats, diplomatic missions, privileged persons, and privileged organizations that are covered by various Acts and the Orders, rules, and regulations promulgated thereunder; and agreements between the federal government provided that such goods are subject to zero-rate customs duty under the Customs Act, 1969, and the conditions set forth therein.
Later that year, on February 4, 2022, FBR issued instructions to field formations that, in response to a request from the Ministry of Foreign Affairs, the issue of tax exemption on imports by diplomats, diplomatic missions, and other privileged persons had been reviewed, and as a result, sales tax would not be collected on imports covered by PCT headings 99.01, 99.02, and 99.06 of Chapter 99 of the First Schedule to the Customs Act, 1969, FBR added.
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To provide legal backing for the aforementioned orders, the FBR is submitting a summary to the cabinet requesting that diplomats, diplomatic missions, and privileged individuals regain their sales tax exemption.
The next cabinet meeting has not been set yet due to the present political climate. Tax authorities, on the other hand, have completed the necessary documentation to legalise the sales tax exemption for diplomats, diplomatic missions, and privileged individuals, officials stated.
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