October 10, 2003
A news item of 20.8.2003 is before me captioned “CBR plans to save expats from double taxation”. According to it our government is giving final shape to an agreement for saving Pakistani workers in Saudi Arabia, Cyprus and Russia from double taxation on their incomes. It adds Saudi Arabia has introduced a new tax on salaries which would be of greatest concern of Pakistanis as most of the workforce from here (Pakistan) is engaged there. Saudi officials are due in Islamabad for finalizing agreement for avoidance of double taxation between and these countries.
Though I have worked in middle east for 17 years but with the Grace of ALLAH THE GREAT I am both mentally and physically a Pakistani and only a Pakistani. I am not an “imported” Pakistani. Foreign living has not changed anything in me nor brought any “special” wisdom expertise in me hence my tinny mind is puzzled and cannot answer a puzzle.
Overseas Pakistanis have and in fact are always given an understanding and impression that they were exempt from payment of taxes on their earnings abroad. In Saudi Arabia tax on salaries has been levied which in other words is income tax. While as we understand Overseas Pakistanis in Pakistan are exempt from payment of income tax on their foreign earnings or remittances then from where the question of “double” taxation arises for which government is negotiating agreement.