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Tax Incentives for Investment in Pakistan

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(Last Updated On: 08/08/2016)

Each modern country has a special tax code aimed to incentivize or encourage any particular economic activity in the country. Two common types of tax incentives are individual incentives and corporate tax incentives. Individual incentives are special incentives dedicated for individuals and include exemptions, deductions, and tax credits. These can be in the shape of individual retirement account, mortgage interest deduction, and hybrid tax credit. On the other hand, corporate tax incentives cam be raised at local, state and federal government levels.

The objective of this article is to provide information concerning tax incentive and other regulatory exemptions available to investors in Pakistan under various schemes. This article by no means can substitute detailed analysis.

1. Exemptions to Export Processing Zone

  • Reduced Rate of Income Tax For Exporter In Export Processing Zone
  • Exemption of Income Tax to Industrial Undertaking in Gawadar
  • Exemption of Custom Duty on Import of Capital Assets & Other Material
  • Exemption of Custome Duty & Other Taxes on Export Good from Zone
  • Zero Rated States to Supplies of Raw Material
  • Zero Rated Statues to Supply of Locally Manufactured Plant & Machinery
  • Exemption from Foreign Exchange Regulations Act, 1947
  • Exemption from Insurance Act, 1938
  • Exemption From Capital Gain Tax to Industrial Undertaking
  • Exemption from Labor Laws

2. Exemption to Special Economic Zone

  • Exemption from Custom Duty on Import of Plant & Machinery
  • Exemption from Income Tax

3. Exemption from Income Tax to Industrial Undertakings

  • Exemption to Electric Power Generation Project
  • Exemption to0 Industrial Undertaking in KPK & Balochsitan Province
  • Exemption to Industrial Undertaking Engaged in Halal Meat Production unit
  • Exemption to Cellular Companies
  • Exemption to LNG Terminal Operator
  • Exemption to Coal Mining Project
  • Exemption to Transformation Line Project
  • Exemption to Manufacturer of Capital Asset for Generation of Renewable Energy

4. Exemption Through 100% Tax Credit From Tax Liability

  • Income Tax Credit for Newly Established Industrial Undertakings
  • Tax Credit for Industrial Undertaking Investing in Capital Asset Through Equity Financing

For further information, read:

Existing Tax Regime is Facilitating Investments in Pakistan

Tax Reductions, Rebates and Credits by Federal Board of Revenue

One comment

  1. Salam

    As you already knows that Income Tax Returns are being filed for the Tax Year of 2016,
    Due date of filing for Non-Resident, Salaried Individuals & Association of persons has been extended for 15 days new date is 15,November 2016 which may be extended further.But to be avoided from any penalty i would suggest you all to file your returns timely and be Active Taxpayer.

    Any Person or Association who want to file their Income Tax Returns can contact me @

    03154848989

    Best Regards

    Mohsin Sajjad

    ITP

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