Over 50 Tax Exemptions Included in Finance Bill 2025-26, Benefiting Institutions and Individuals

ISLAMABAD: Just days after the National Assembly approved the Finance Bill 2025-26, it has emerged that the government has granted over 50 tax exemptions to a wide range of institutions, funds, and individuals — including a former president and his widow, military-affiliated organizations, and international financial institutions — The News reported Monday.

The Finance Bill, which is expected to be signed into law by President Asif Ali Zardari today, outlines extensive tax relief measures, expanding upon earlier frameworks established by the Federal Board of Revenue (FBR). The FBR had already offered regulatory provisions and tax credits to charitable and non-profit organizations (NPOs), but the newly passed Bill takes this further by offering direct exemptions.

Among the most notable tax exemptions are those for the pension of a former president and his widow, as well as institutions such as Karandaaz Pakistan, the Army Welfare Trust, Fauji Foundation, and the State Bank of Pakistan. Also included are the Pakistan Council of Scientific and Industrial Research, WAPDA, Pakistan Agricultural Research Council, and corporatized WAPDA entities until tariff finalization.

Numerous relief and development funds also enjoy exemptions, including the Prime Minister’s Special Fund for Terror Victims, PM’s COVID-19 Relief Fund, Flood and Earthquake Relief Funds, the National Disaster Risk Management Fund, and the Supreme Court Dams Fund.

Additionally, tax relief has been extended to key financial and regulatory bodies such as the Securities and Exchange Commission of Pakistan, Privatisation Commission, Audit Oversight Board, and the Deposit Protection Corporation.

Sukuk-related entities, such as WAPDA First and Second Sukuk Companies, Pakistan International Sukuk Companies, and Islamic Naya Pakistan Certificates Company Limited, are also included.

International and regional organizations listed for exemption include:

• Asian Development Bank

• Asian Infrastructure Investment Bank

• International Finance Corporation

• Islamic Chamber of Commerce and Industry

• ECO Trade and Development Bank

• International Islamic Trade Finance Corporation

• COMSATS

• SAARC Arbitration Council

• International Parliamentarians’ Congress

The Institutions of the Aga Khan Development Network (Pakistan), under a longstanding agreement with the Government of Pakistan, are also part of the exempted entities.

One unique inclusion is the exemption for any monetary award received by Pakistani athletes from the federal or provincial governments or public officials for winning Olympic medals. This specific clause will be effective from the tax year 2025.

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Critics have already raised concerns over the lack of transparency and the wide-ranging nature of the exemptions, questioning the fiscal impact and fairness of extending such relief to powerful institutions while ordinary citizens face increasing tax burdens.