Tax proposals are being fine-tuned ahead of a meeting with the International Monetary Fund (IMF) staff, which will begin vetting government’s budgetary proposals for fiscal year 2021-22 from next week, said sources in the Ministry of Finance. One of the proposals is to place a limit on income tax-free pensions being received by the retired civil servants, judges and generals, the sources said. Read: Tarin rules out new taxes, hike in tariffsTax expenditure reports of 2019-20 showed that the federal government sustained a loss of about Rs21 billion on account of tax-free pensions. Tax authorities have suggested to the government to rewrite the text of a clause of the Income Tax Ordinance through the Finance Bill 2021 aimed at plugging a lacuna that led to a court judgement to exempt the judicial allowance from income tax, said the sources. Last month, the FBR had exempted judicial allowances from income tax by honouring court judgements.

Source: The Express Tribune May 21, 2021 06:31 UTC