The federal government is considering removing sales and income tax exemptions for FATA/PATA areas.
According to sources from ProPakistani, the Federal Board of Revenue (FBR) has drafted tax proposals for the upcoming fiscal year budget. There are indications that the Chairman of the Federal Board of Revenue will present these proposals to the finance minister sometime this week. The sources also revealed that the FBR has recommended the removal of exemptions for FATA/PATA.
The revenue authority anticipates collecting up to Rs. 100 billion in taxes from this proposed measure. It’s worth noting that the government had extended sales and income tax exemptions for an additional year during the budget in June 2023. Initially, the government had proposed withdrawing these exemptions before the current year’s budget but later decided to extend them until June 30, 2024.
Currently, the government provides tax incentives amounting to Rs. 1,200 billion to various industries. Sources suggest that several industries, particularly the steel sector, have repeatedly urged the federal government to establish a uniform tax rate for all businesses across the country.
Reportedly, individuals engaged in business in FATA are exploiting these exemptions by conducting business in other parts of the country, which is detrimental to the economy.
