Islamabad, June 30, 2025: The recently passed Finance Bill 2025–26 has drawn attention for incorporating over 50 tax exemptions, benefiting a wide array of institutions and individuals, including the Army Welfare Trust, Karandaaz Pakistan, the pension of a former president and his widow, and several public sector bodies. These provisions, not widely discussed during the parliamentary debate, were reported by an English daily on Monday.
With President Asif Ali Zardari expected to give his formal assent today, the Finance Bill is set to become law. The Federal Board of Revenue (FBR), which previously offered tax credits to charitable and non-profit organisations under a regulatory framework, has now significantly expanded tax exemptions in the bill passed by Parliament.
The exemptions cover a diverse mix of entities. These include financial and development institutions such as the State Bank of Pakistan and its Banking Services Corporation, the FBR Foundation, the Pakistan Council of Scientific and Industrial Research, and the Pakistan Agricultural Research Council. The Pakistan Water and Power Development Authority (WAPDA) and its corporatised entities have also been granted relief, effective from their creation until the finalisation of their corporatisation process.
Tax exemptions have also been extended to several national and provincial relief funds, including the Prime Minister’s Special Fund for Victims of Terrorism, the Chief Minister Punjab’s Relief Fund for Internally Displaced Persons, the National Disaster Risk Management Fund, the Prime Minister’s COVID-19 Pandemic Relief Fund-2020, and the Prime Minister’s Relief Fund for Flood, Earthquake and other Calamities, effective from August 5, 2022.
Educational and social sector initiatives such as the National Endowment Scholarship for Talent (NEST), the Pakistan Poverty Alleviation Fund, the National Rural Support Programme, and the Balochistan Education Endowment Fund (BEEF) have also been included. Other beneficiaries include the Securities and Exchange Commission of Pakistan, the Privatisation Commission, the Audit Oversight Board, and development finance institutions like the Export-Import Bank of Pakistan, the Pakistan Mortgage Refinance Company, and various WAPDA Sukuk and TFC issuing entities.
Notably, Karandaaz Pakistan has been granted exemption from tax year 2015 onwards, while the Institutions of the Aga Khan Development Network continue to receive relief under the 1994 accord signed with the Government of Pakistan. International and regional organisations such as the International Finance Corporation, the Asian Development Bank, the Asian Infrastructure Investment Bank, and the Islamic Chamber of Commerce and Industry are also included.
Additional exemptions apply to entities like the Shaheed Mohtarma Benazir Bhutto Institute of Trauma, Karachi, the National Memorial Bab-e-Pakistan Trust, the International Parliamentarians’ Congress, and scientific and regional bodies such as COMSATS and the Saarc Arbitration Council.
The list concludes with exemption for the Army Officers Benevolent Fund, as well as tax relief for Pakistani athletes receiving government awards for winning medals at the Olympic Games, effective from tax year 2025.
The scope of these exemptions underscores the government’s intent to support a wide network of development, charitable, and strategic institutions. However, it may also invite scrutiny over transparency and fiscal discipline as the government continues to struggle with expanding its narrow tax base.
