Dual taxation treaty modalities to be finalised: Pak-Afghan JEC meets on February 23

Pakistan and Afghanistan would finalise modalities for signing Avoidance of Double Taxation and the Prevention of Fiscal Evasion Convention in the next meeting of the 9th session of the Pak-Afghan Joint Economic Commission (JEC) to be held on February 23-24 in Kabul. A senior FBR official told Business Recorder here on Tuesday that the issue of Avoidance of Double Taxation and the Prevention of Fiscal Evasion convention would be discussed in detail in the upcoming meeting of Pak-Afghan Joint Economic Commission to be held in Afghanistan.

Sources said that Pakistan is making efforts to ink the Avoidance of Double Taxation and the Prevention of Fiscal Evasion convention with Afghanistan. Pakistan has drafted a standard model of Avoidance of Double Taxation agreement with Afghanistan, but so far there is no response from the Afghan tax authorities on the issue. Afghan tax authorities wanted to tax Pakistani national flag carrier in the absence of convention on Avoidance of Double Taxation between two countries.

In case the convention is inked between the two, exemption may be available to airlines of both the countries. During the last meeting between Finance Minister Ishaq Dar and his Afghan counterpart, Dr Hazrat Omer Zakhilwal, in Pakistan, Dar also took up the matter of avoidance of double taxation treaty between the two countries for encouraging private investment. Afghanistan and Pakistan mutually agreed to launch negotiations for avoidance of double taxation treaty.

The FBR has taken up the matter between the Ministry of Foreign Affairs as well as Ministry of Commerce to pursue Afghan authorities for early initiation of negotiations for signing of the convention. However, so far no development has been witnessed in this regard. The signing of the treaty with Afghanistan is in the benefit of the Pakistani businessmen particularly airlines industry.

Credit: Business Recorder