Staff Reporter :
The National Board of Revenue (NBR) announced yesterday that it has reinstated a five-year income tax exemption for Grameen Bank to eliminate discrimination in the sector.
Grameen Bank, founded by Nobel Peace Prize laureate Prof. Muhammad Yunus, has enjoyed tax exemptions since its inception in 1983. However, the benefit was discontinued in 2020. The reinstatement of the tax waiver came through a statutory order on 10 October 2024, marking the end of a four-year gap.
The NBR stated in a press release that the exemption will remain in effect until 31 December 2029, subject to certain conditions. While the exact conditions were not disclosed, the NBR emphasized that other institutions engaged in similar microcredit operations already enjoy similar tax benefits.
Despite the exemption, Grameen Bank will still be required to submit annual income tax returns, as per the gazette notification.
The press release highlighted that since Grameen Bank’s inception, the institution had been exempt from income tax, super tax, and business profit tax. However, the exemption was halted under the new framework introduced by the Income Tax Act, 2023.
Grameen Bank, established under the Grameen Bank Ordinance of 1983 and later governed by the Grameen Bank Act of 2013, is not a scheduled bank. It primarily focuses on microcredit activities.
The NBR clarified that the institution does not receive automatic tax exemptions under the new law since it is not registered with the Microcredit Regulatory Authority, despite offering services similar to other microcredit organizations.