Tax holiday scheme likely to be extended

The government might extend the tax holiday scheme for another couple of years. According to the NBR sources, the government is considering the extension as it wanted to increase the investment in the country for attaining 7.3 per cent GDP in the next fiscal (2014-15), according to a news agency.
The current investment scenario in the country is not up to the mark and that’s why the government wanted to give a signal to the investors by extending the tax holiday system for a couple of years.
The NBR official added that the Finance Minister might announce the decision in his budget speech on June 5.
Meanwhile, both the World Bank and the International Monetary Fund (IMF) have prescribed the government for an end to tax holiday facilities to increase revenue earnings.
The NBR, however, referred to the similar tax holiday systems in India, Pakistan, Sri Lanka and Indonesia where the system has been contributing to industrial growth.
A tax holiday is a temporary reduction or elimination of a tax. The government usually creates tax holidays as incentives for business investment.