Pakistan Cricket Board (PCB) and Federal Board of Revenue (FBR) have finally settled on four percent tax on all income instead of on commercial rates of 35 percent as earlier were demanded by government authorities during several notices served on the sports body.
The Truth Pursuit has learnt from well-placed sources that long standing dispute over payment issues have finally resolved. The FBR during the past one year has demanded the PCB to pay 35 percent tax on all the income especially the one they earn from holding neutral series abroad and on the inaugural Pakistan Super League (PSL) that held at the start of the year. The 35 percent tax rate was imposed on the PCB considering the commercial aspect of the earning.
Twice in the recent past, the PCB accounts were frozen which later were restored on the PCB decision to move the court of law. Though the legal battle is still pending, PCB officials have succeeded in involving Ministry of Finance and DBR in successful negotiation according to which the PCB would now be liable on 4 percent tax on all income generated from hosting neutral venue series and cricket leagues to settle the long standing dispute.
The FBR has proposed amendment in Finance Bill according to which PCB would be liable to four percent of tax on all incomes on all such cricket exchanges hosted aboard and billed as home series with respect to tax years 2010 and onward.
This proposal is subject to conditions that all the pending appeals, petitions and references before any appellate authority on the issue of tax rate, is withdrawn and all the tax liabilities up to tax year 2016, at the rate of 4 percent of gross receipts, are paid by 30-06-2016, an official confirmed to The Truth Pursuit.
“It is good news for Pakistan Cricket that it had convinced the FBR on four percent of tax instead of paying tax on commercial rates. Hopeful all pending legal matters would be settled amicably now,” a PCB official when contacted said.
It has been proposed that currently, income of PCB, from various avenues and sources is treated global income by the department, whereas, PCB has a point of view that it earns income from home series in UAE, therefore, it should be treated in line with exports and should be taxed at 1 percent on FTR basis.
FBR and PCB have been at the logger ends regarding the tax payment issues. Several meeting took place in recent past between official of both the boards to seek a viable solution of the issue. The tax issue has created huge tax demands from PCB with respect to income of a few preceding years, which has been causing a rift between the two bodies.
Currently, income of PCB, from various avenues and sources is treated global income by the department, whereas, PCB has a point of view that it earns income from home series in UAE therefore it should be treated in line with exports and should be taxed at 1 percent on Final Tax Regime (FTR) basis.
All efforts to contact PCB top officials including Chairman Shaharyar Khan and Executive Committee Head Najam Sethi to get their point of view, went fruitless.