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Tax credit for employment generation by manufacturers
(1) Where a taxpayer being a company formed for establishing and operating a new manufacturing unit sets up a new manufacturing unit between the 1st day of July, 2015 and the 30th day of June, 2019 , (both days inclusive) it shall be given a tax credit for a period of ten years.
(2) The tax credit under sub-section (1) for a tax year shall be equal to two percent of the tax payable for every fifty employees registered with The Employees Old Age Benefits Institution or the Employees Social Security Institutions of Provincial Governments during the tax year, subject to a maximum of ten percent of the tax payable.
(3) Tax credit under this section shall be admissible where—
(a) the company is incorporated and manufacturing unit is setup between the first day of July, 2015 and the 30th day of June, 2018, both days inclusive;
(b) employs more than fifty employees in a tax year registered with The Employees Old Age Benefits Institution and the Employees Social Security Institutions of Provincial Governments;
(c) manufacturing unit is managed by a company formed for operating the said manufacturing unit and registered under the Companies Act, 2017 (XIX of 2017) and having its registered office in Pakistan; and (d) the manufacturing unit is not established by the splitting up or reconstruction or reconstitution of an undertaking already in existence or by transfer of machinery or plant from an undertaking established in Pakistan at any time before the1st July 2015.
(4) Where any credit is allowed under this section and subsequently it is discovered, on the basis of documents or otherwise, by the Commissioner that any of the conditions specified in this section were not fulfilled, the credit originally allowed shall be deemed to have been wrongly allowed and the Commissioner may, notwithstanding anything contained in this Ordinance, re-compute the tax payable by the taxpayer for the relevant year and the provisions of this Ordinance shall, so far as may be, apply accordingly.
(5) For the purposes of this section, a manufacturing unit shall be treated to have been setup on the date on which the manufacturing unit is ready to go into production, whether trial production or commercial production.
(2) The tax credit under sub-section (1) for a tax year shall be equal to two percent of the tax payable for every fifty employees registered with The Employees Old Age Benefits Institution or the Employees Social Security Institutions of Provincial Governments during the tax year, subject to a maximum of ten percent of the tax payable.
(3) Tax credit under this section shall be admissible where—
(a) the company is incorporated and manufacturing unit is setup between the first day of July, 2015 and the 30th day of June, 2018, both days inclusive;
(b) employs more than fifty employees in a tax year registered with The Employees Old Age Benefits Institution and the Employees Social Security Institutions of Provincial Governments;
(c) manufacturing unit is managed by a company formed for operating the said manufacturing unit and registered under the Companies Act, 2017 (XIX of 2017) and having its registered office in Pakistan; and (d) the manufacturing unit is not established by the splitting up or reconstruction or reconstitution of an undertaking already in existence or by transfer of machinery or plant from an undertaking established in Pakistan at any time before the1st July 2015.
(4) Where any credit is allowed under this section and subsequently it is discovered, on the basis of documents or otherwise, by the Commissioner that any of the conditions specified in this section were not fulfilled, the credit originally allowed shall be deemed to have been wrongly allowed and the Commissioner may, notwithstanding anything contained in this Ordinance, re-compute the tax payable by the taxpayer for the relevant year and the provisions of this Ordinance shall, so far as may be, apply accordingly.
(5) For the purposes of this section, a manufacturing unit shall be treated to have been setup on the date on which the manufacturing unit is ready to go into production, whether trial production or commercial production.
Amendment history (12)
- Inserted by the Finance Act, 2016.
- Section 64A is re-numbered as section 60C by Finance Act, 2017
- Section 64AB is re-numbered as section 60D by Finance Act, 2017
- Inserted by the Finance Act, 2015.
- The figure “2018” substituted by the Finance Act, 2016.
- The word “one” substituted by the Finance Act, 2016.
- The expression “Companies Ordinance, 1984 (XLVII of 1984)” substituted by the Finance Act,
- New sub-section 64C inserted by the Finance Act, 2019.
- Section 64C omitted by the Finance Act, 2021. Earlier this omission was made through Tax Laws
- Section 64D inserted by the Finance Act, 2021.
- Section 64D substituted by the Finance Act, 2026. The substituted section
- Inserted by the Finance Act, 2002
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 126
Unofficial reference, compiled from the FBR’s consolidated Income Tax Ordinance 2001 (amended up to 30 June 2026). Provided for general information only — not an official FBR publication and not legal or tax advice. Always verify against the official FBR text before relying on it for filing or any decision.