Assignment no#02

Pakistan center for philanthropy (PCP)

 Pakistan Centre for philanthropy (PCP)

Pakistan Centre for Philanthropy (PCP) is a non-profit organization registered on 27th December,
2001 with Securities and Exchange Commission of Pakistan (SECP) and licensed under section
42 of the Companies Ordinance 1984.

Vision
The three sectors of society - business, civil society and the government - work together in a
strengthened partnership for social development in Pakistan.

Mission:
To enhance the volume and effectiveness of indigenous philanthropy for social development in
Pakistan.

Pakistan Centre for Philanthropy (PCP) is a designated Certification Agency by the Federal Board
of Revenue (FBR), Government of Pakistan vide S.R.O. No. 1116(1)/2003 dated December 18,
2003. In accordance with the section 2(36) of Income Tax Ordinance, 2001, Non Profit
Organizations working in Pakistan are required to seek approval of Commissioner Inland Revenue
to be recognized as not for profit. After seeking approval of Commissioner Inland Revenue, NPOs
can avail other tax benefits including tax credit and exemption as well. As part of the procedural
requirement as envisaged and provided in rules 211(2)(g), 213 (2)(d), 217 (1) (b)(vii),
220(1)(b)(vi), 220 A (3) (d) and 220 A(7)(1)(b)(iv) of Income Tax Rules 2002 , PCP conducts
performance evaluation of Non-Profit organizations on behalf of FBR and certifies that NPOs meet
with the desired requirements of certification standards (notified by FBR) in the areas of internal
governance, financial management and programme delivery.

PCP Certification
PCP Certification is a performance evaluation of the applicant non-profit organization (NPO)
against PCP Certification Standards in the categories of internal governance, financial
management and programme delivery.
PCP Certification Standards
PCP Certification Standards consist of best standards for the not for profit sector. PCP Certification
Standards have also been notified by the Federal Board of Revenue, Government of Pakistan.
Who can apply for PCP CERTIFICATION?
Any Non-Profit Organization (NPO) which has been registered for at least one or more years under
a non-profit registration law at any location in Pakistan, can apply for PCP Certification. Most
common NPO registration laws in Pakistan include Trust Act, 1882, The Societies Registration
Act, 1860, The Voluntary Social Welfare Agencies (Registration & Control) Ordinance, 1961 and
Section 42 of The Companies Ordinance, 1984. International NGOs which have been working in
Pakistan for at least one or more years under arrangements of a MoU signed with the Government
of Pakistan, can also apply for PCP Certification.
Procedure to apply for PCP Certification
Application for PCP certification can be made by accessing the “Apply online” tab on our website;
www.pcp.org.pk. As a first step, the organization is required to create a login ID and then online
application form can be accessed. Application form has to be completed online. Once complete,
organization is required to submit it electronically, take a print out of submitted application form
and send it at our postal address along with required documents, fee and applicable taxes.

NPO Certification

The procedure for grant of approval under section 2(36) of the Income Tax Ordinance, 2001 is
governed by the relevant Income Tax Rules, 2002 (Rules 211-220B). According to clause (g) of
sub-rule (2) of Rule 211 (Income Tax Rules 2002), Non-Profit Organizations are required to
furnish a detailed report with regard to the performance of the organization for achieving its aims
and objectives during the preceding financial year duly evaluated and certified by an independent
certification agency approved by an authority designated by the Government of Pakistan. In this
regard, the Federal Board of Revenue (FBR) via notification S.R.O. No. 1116(1)/2003 dated
December 18, 2003 has notified the Pakistan Centre for Philanthropy (PCP) to act as a Certification
Agency for abiding of rules 211 to 220B of the Income Tax Rules 2002 Moreover, according to
Rule 220A(1)(b)(vi) of Income Tax Rules 2002, in order to avail tax credit under section 100(c)
of Income Tax Ordinance 2002, Non-Profit Organizations running private universities or
otherwise, are required to furnish a detailed report with regard to the performance of the
organization similar to the one referred in Rule 211(2)(g) above.

SCOPE

PCP Certification is based on an examination of the NPO's functioning and performance during
the last three years. Moreover, the evaluation process examines the operations of organization in
the light of objectives as stated in the governing document of the organization and certifies that
the organization meets the requirements as per the set standards agreed with the FBR. Certification
by PCP is voluntary and optional does not guarantee non-profit status, as this is a matter for
determination by FBR and the relevant Commissioner of Inland Revenue.
PCP fee for Certification
In order to cover costs incurred during the process of certification, PCP charges subsidized fee.
Certification fee is linked to the annual average receipts of the organization during the last three
years. In case the organization has been in operation only for one or two years then average shall
be calculated based on one or two years, respectively. The information regarding certification fee
for different types of Certification is given as under: Regular Certification (Where the organization
has been in operation for at least three or more years).
Benefits of PCP Certification?
There are various benefits that certified organizations can enjoy. Certification is one of the
requirements for obtaining tax benefits including approval, tax credit and exemption from
Commissioner Inland Revenue, Government of Pakistan. In addition to tax benefits, certification
leads to increase in credibility. PCP certified organizations are included in PCP’s annual directory
which is widely circulated among donor community and other key stakeholders including
Government. Moreover, in the light of Government’s recently introduced registration policies,
donors and INGOs have increasingly required local NPOs to seek PCP Certification to access
funds.