Concept of NPO/NGO in Pakistan  

What is a Non-profit Organisation (NPO)? 

Non-profit organisation is an organisation that is established in Pakistan for educational, charitable, welfare or development purposes. It is established with the express declaration that its assets and income will be consumed to achieve its objectives and no portion thereof shall be distributed, paid or transferred directly or indirectly by way of dividend, bonus, and profit or by any other means to its Board of Directors, organisers or any member of its general body. 

Some distinguishing features of NPOs: 

·         Institutionally separate from state 

·         Non profit distributing 

·         Some level of voluntary contribution in terms of time or resources 

·         Control of its own affairs  

·         Membership is not legally required 

·         Institutional presence and structure 

Registration of NPO: 

An NPO can be registered under any of the Registration Laws in Pakistan. The most popular instruments of registration are; 

To make profit: 

This is not to say that a non-profit organisation cannot make profit. Sure it can, but such profit (or surplus) should be ploughed back to further the mission of the organisation and not be distributed in any way amongst its members, directors, staff etc. 

Income tax exemptions: 

The Income Tax Ordinance, 2001, however, defines an NPO in a different context. For the purposes of Income Tax, an NPO is an organisation approved by the CBR (or Commissioner of Income Tax) as a non-profit organisation. So for the purposes of income tax exemptions, approval by the CBR or the Commissioner of Income Tax is necessary to be a non-profit organisation. 

Difference between Charity and NPO 

Both are same; they are. A ‘charity’ or a ‘non-profit organisation’ is an organisation established for any of the following purposes;