Two Chinese companies exempted from WHT for CPEC projects
Karachi: The Federal Board of Revenue (FBR) has granted exemption on withholding tax (WHT) to two Chinese firms over special purposes on importing motor vehicles for China-Pakistan Economic Corridor (CPEC) on Thursday.
The FBR said in a notification that the provisions of section 148 of the Income Tax Ordinance, 2001 shall not apply for import of plant, machinery and equipment including dumpers and motor vehicles imported for special purposes for construction of Sukkur-Multan section of Karachi-Peshawar Motorway project and Karakorum Highway (KKH) Phase-ll (Thakot to Havellian Section) of CPEC project respectively.
The Chinese construction companies including China State Construction Engineering Corporation Ltd and China Communication Construction Company have been exempted to pay withholding taxes on import of machinery and special purposes motor vehicles.
Now, the Collector of Customs shall not collect advance taxes from the above mentioned companies on the value of the goods.
The FBR has made amendments in the Second Schedule of Income Tax Ordinance after the approval of the Economic Coordination Committee (ECC) of the Cabinet.
Earlier, The ECC had approved the proposal submitted by the Ministry of Communications for an exemption of contractors, for the completion of two early harvest projects under the CPEC, from all customs duties, levies and other relevant taxes, in order to import equipment and construction material.
Hence, the government has granted a sales tax exemption for the imported equipment and the construction machinery required for the construction of the Karachi – Peshawar Motorway and the Karakorum-Highway (KKH).
‘FBR has already exempted the above said companies from sales tax on import of all equipment and construction machinery, if not manufactured locally, imported by China State Construction Engineering Corporation Limited for the construction of Karachi – Peshawar Motorway (Sukkur – Multan Section) and China Communication Construction Company for the construction of Karakorum Highway (KKH) Phase-ll (Thakot – Havellian Section).