Here’s How LUMS Allegedly Got Tax Exemptions Despite Charging Hefty Fees - Android

Lahore University of Management Sciences (LUMS) has recently been granted tax exemption in the federal budget for FY 2020-21 despite… Read More

The post Here’s How LUMS Allegedly Got Tax Exemptions Despite Charging Hefty Fees appeared first on .

Lahore University of Management Sciences (LUMS) has recently been granted tax exemption in the federal budget for FY 2020-21 despite collecting hefty fees from students.

Rumors have it that Abdul Razak Dawood, the adviser to the Prime Minister (PM) on Commerce and Investment who is also the Pro-Chancellor of LUMS, exercised his influence and managed to get the tax exemption for LUMS.

Though there is no official word from LUMS, Adviser to the Prime Minister on Finance, Dr. Hafeez Shaikh’s evasion of a question regarding tax exemption accorded to LUMS during the post-budget conference over the weekend has raised some eyebrows.

Moreover, it is reported that LUMS has been exempted from any documentary requirements to ensure that its Non-Profit Organization (NPO) status remains intact.

LUMS enjoys tax exemptions under the Income Tax Ordinance 2001, which states:

An NPO shall be allowed a tax credit equal to one hundred percent of the tax payable, including minimum tax and final taxes payable under any of the provisions of this Ordinance.

Eligibility for the tax credit for educational institutes managed by non-profit organizations is defined as:

Income of a university or other educational institution being run by a non-profit organization existing solely for educational purposes and not for purposes of profit is eligible for the tax credit.

It must be noted that no institute can be granted a permanent tax exemption as per clause 36(c) of the Income Tax Ordinance 2001.

NPO status is approved for a specified period, on an application made by such a person in the prescribed form and manner, accompanied by the prescribed documents and, on requisition, such as other documents as may be required by the ordinance.

However, the Commissioner Inland Revenue of the FBR holds the authority to grant, extend, or revoke an NPO status of an organization as per Section 2(36) of the Income Tax Ordinance 2001.

This lends credence to reports that Abdul Razak Dawood, being in one of the most important positions in the government, exercised his influence over FBR to get the NPO status approved and subsequent tax exemptions for LUMS in the budget FY 2020-21.

Therefore, notwithstanding the recent unreasonable and exorbitant hike of 41% in the semester fee, LUMS will continue to enjoy tax exemptions listed in Section 100(c) of the Income Tax Ordinance, 2001.

Via: Profit 

The post Here’s How LUMS Allegedly Got Tax Exemptions Despite Charging Hefty Fees appeared first on .