The Civil Aviation Authority (CAA) on Friday clarified that allegations leveled in a letter from Civil Aviation Officers Association are based on malafide intention and lacking true facts. In a press release the CAA spokesperson viewed that FBR has neither imposed TAX PENALTY nor issued any recovery letter to CAA Pension fund. He stated that CAA Employees Pension Fund was established as a Defined Benefit plan for the benefit of eligible employees of CAA under trust deed dated 18-08-2000 in accordance with rule 01 of part III of the sixth schedule of Income Tax Ordinance 1979. In compliance to applicable laws FBR treated the investment income earned by pension fund as tax exempted from deduction of income/withholding taxes. As a consequence of constitutional amendment, the Province of Sindh repealed the Trust Act 1882 and promulgated the Sindh Trust Act 2020 later amended as Sindh Trust (Amendment) Act 2021.

FBR revoked registration of CAA Employees Pension Fund and require the Pension Fund to be re-registered under the Sindh Trust Act 2021. FBR commenced deduction of taxes on investment income generated by the fund however, CAA Pension Fund approached relevant banks and provided stay order granted in favor of CAA Pension Fund by the honorable Supreme Court of Pakistan in suite against provision of tax exemption certificate by exempted entities. Registration Process with Govt. Of Sindh under Trust Act 2021 is at final stage and after its incorporation the exemption on withholding of funds profits would be taken up with FBR, he stated.

 
Credit: Independent News Pakistan (INP)