Govt clarifies conditions for black money investment in manufacturing sector
The government has clarified the conditions over investment of untaxed money in manufacturing sector.
The investment has to be made in new company and the opportunity will be provided only for the current fiscal year, according to the income tax poripatra (clarification) 2021-22 of National Board of Revenue (NBR).
The clarification mentions that the authorities will not allow only paid up capital, buying land or loan from the paid up capital in forming the new company in the name of visible investment to get the facility of whitening black money given in the current fiscal year budget.
It also said the authorities will not take into consideration the agreement signing and opening letter of credit (LC), if the company does not implement these within the budgetary deadline.
In the budget for 2021-22 fiscal, the government allowed investing untaxed money in manufacturing industries with the condition of paying 10% tax.
According to the NBR SRO, this investment facility is applicable only for the current fiscal year beginning 1 July.
In this regard, a new section has been incorporated in the Income Tax Ordinance, named Section "19AAAAAA", which will be in effect till 30 June, 2022.
The NBR has incorporated a indemnity provision amending the Finance Bill, barring relevant government agencies from questioning the sources of such tainted money.
Notable, from the 2019-20 financial year, the government has been allowing investment of black money in high-tech parks and economic zones, with 10% tax only. The facility will be available till 30 June, 2024.
