FBR Announces Tax Exemption for Overseas Pakistanis, Streamlining Process with Digital Verification

The Federal Board of Revenue (FBR) has introduced a major tax relief initiative for overseas Pakistanis, offering exemptions from higher tax rates without requiring Active Taxpayers List (ATL) status.

This change applies specifically to non-resident individuals holding Pakistan Origin Cards (POC) or National ID Cards for Overseas Pakistanis (NICOP). The FBR’s latest move is aimed at encouraging investments in Pakistan by simplifying tax processes for expatriates.

Key Highlights of the FBR Tax Exemption Initiative

1. Exemptions from Higher Tax Rates
   Under Clause 111AC of the Income Tax Ordinance, 2001, overseas Pakistanis can now avail exemptions from higher tax rates applied under sections 236C and 236K, which pertain to property transactions and other financial dealings.
2. Digital Verification via IRIS
   A new digital verification system has been launched through the FBR’s IRIS platform. Non-residents must upload their POC or NICOP documentation while generating a Computerized Payment Receipt (CPR). The system then issues a provisional Payment Slip Identification (PSID), initiating the verification process, which is designed to be completed within one business day.
3. Streamlined Verification Process
   The verification involves multiple layers of approval:
   • Initial review by Chief Commissioners of Inland Revenue (CCIRs). Final verification by Commissioners of Inland Revenue (CIRs).
   Successful applicants will receive notifications through SMS and email, ensuring a seamless and transparent process.

Nationwide Rollout in Tax Offices

This initiative will be implemented across all major tax offices, including:

• Large Taxpayers’ Offices (LTOs)
• Medium Taxpayers’ Offices (MTOs)
• Corporate Tax Offices (CTOs)
• Regional Tax Offices (RTOs)

The FBR aims to eliminate bureaucratic delays, making the process faster and more accessible for overseas Pakistanis.

Encouraging Foreign Investment

The FBR’s initiative aligns with the government’s goal to boost foreign investment, particularly in Pakistan’s real estate sector. By offering tax exemptions without ATL requirements, the government hopes to attract more overseas Pakistanis to invest in their home country.

A senior FBR official stated, “This new system represents a significant step forward in facilitating overseas Pakistanis. The verification process has been designed to ensure minimal delays for applicants.”

How Overseas Pakistanis Can Avail Tax Exemptions

To benefit from this exemption, overseas Pakistanis should follow these steps:

1. Register on the IRIS platform.
2. Upload their POC or NICOP documentation during the CPR creation process.
3. Wait for verification, which is expected to be completed within one business day.

The FBR’s tax exemption initiative is a significant step toward simplifying processes for overseas Pakistanis and encouraging their investments in Pakistan. By leveraging digital technology, the FBR has made it easier for expatriates to contribute to the country’s economic growth without facing unnecessary hurdles.