ISLAMABAD - Pakistan Development Alliance (PDA), a group of non-profit organisations (NPOs) working together for better governance and accountability, has voiced concern over proposed imposition of income tax on NPOs on their surplus restricted funds.

In a joint declaration issued here on Monday, the alliance demanded to withdraw any such proposed shift, describing it as “unwarranted and unjustifiable.” The federal government, under Section 100C of the Finance Bill 2017, has proposed income tax at rate of 10 percent for NPOs on surplus restricted funds. In case the administrative expenses exceed 15 percent of the total receipts, NPO would not qualify for tax credit under this Section.

PDA National Coordinator Ziaur Rehman said, “Such move does not appear to be in line to promote NPOs activities and programmes, which otherwise provide relief to marginalised segments of the society and that are purely free of cost, negating any benefit out of their welfare agenda and development plans.”

The declaration says; “The imposition of Income Tax on the surplus restricted funds of NPOs is nothing but is tantamount to discourage these (NPOs) in their welfare cause and may hamper their performance to some extent.” Under the given circumstances, NPOs demanded the federal government to withdraw proposed imposition of Income Tax on surplus restricted funds to help them work for welfare of ordinary citizens.