20000205

Pak seamen working

on foreign vessels

need not pay IT

MUZAFFAR QURESHI

KARACHI: The Central Board of Revenue (CBR) has withdrawn income tax on the income of Pakistani seamen working on foreign flag vessels and has as such issued directions for the withdrawal of notices issued to the recruiting agents asking them to deposit tax on behalf of the seafarers employed through them.

The decision has been conveyed by the Secretary Ministry of Communications, to Farouq H. Rahimtoola, Chairman Pakistani Ships Agents Association (PSAA).

In a letter, the commerce secretary said that the question of restoration of tax exemption for seafarers serving on foreign ships was taken up with the Central Board of Revenue. The CBR replied that the instructions had been issued to the Regional Commissioner Income Tax, Southern Region, Karachi, to withdraw the notices issued to shipping agents, the letter concluded.

It may be pointed out that the seafarers working on foreign flag vessels were earlier exempted from income tax. The CBR, however, amended the exemption rule and levied income tax on them from the current financial year and demanded of the ships agents recruiting seamen for foreign vessels to deposit tax on behalf of the seamen recruited by them.

The PSAA strongly opposed the levy and emphasised that seamen working on foreign vessels were beyond tax jurisdiction of the Pakistan government and the levy would greatly affect precious foreign exchange income of about 70 million dollars per annum.

Farouq Rahimtoola in a letter to the communications secretary, had requested him to take up the issue of income tax which would spoil a lucrative job market for Pakistani seamen in addition to the loss of foreign exchange income as after the levy the seamens would prefer to keep their foreign income abroad instead of remitting the same home.

The PSAA Chairman has thanked the communications secretary and the CBR Chairman for taking a wise and far sighted decision which would not only boost country's foreign exchange income but would create greater employment facilities for the Pakistani seafarers.