ISLAMABAD: The Federal Board of Revenue (FBR) has notified the tax exemptions for the erstwhile Fata and Pata for next five years as part of the government’s strategy to extend benefits to people.
The FBR has issued four notifications, which stated that no sales tax will be charged on electricity bills of domestic, commercial and industrial consumers in Fata.
The erstwhile Fata and Pata had become part of the Khyber Pakhtunkhwa after the 31st Constitutional Amendment. However, no SRO has been issued to deal with the non-customs paid vehicles in Fata/Pata.
Under the package, non customs paid vehicles would be allowed to be used in erstwhile Fata/Pata for a period of five years ending on 30th June 2023.
However, these vehicles will not be allowed to cross over to other areas of the country. On the expiry of the five years’ relaxation period, the vehicles would be regularized on payment of leviable duty and taxes.
The federal government has exempted whole of sales tax on goods produced and supplied by industrial units located in districts of Chitral, Dir and Swat (which includes Kalam), the Tribal Area in Kohistan district, Malakand Protected Area, the Tribal Area adjoining Mansehra district, the former State of Amb, Zhob district, Loralai district (excluding Duki Tehsil), Dalbandin Tehsil of Chagai District and Marri and Bugti tribal territories of Sibi district, Tribal areas adjoining the districts of Peshawar, Kohat, Bannu, Lakki Marwat, Dera Ismail Khan, Tank as well as Bajaur Agency, Orakzai Agency, Mohmand Agency, Khyber Agency, Kurram Agency North Waziristan Agency and South Waziristan Agency.
However, the exemption shall be available only to those industrial units which have been set up on or before May 31, 2018 and industrial production and supplies have been commenced on or before the said date.
The federal government has also exempted income tax on profits and gains derived by individuals from any source in the aforesaid districts.
The government has exempted of income tax on profits and gains of existing businesses conducted by individuals for a period of five years. These businesses however need to be registered with FBR by 30th September 2018.
The income tax has been exempted on profits and gains of existing businesses conducted by association of persons and companies from any source in the districts
It has also exempted the Fata and Pata from sales tax to the retailers to facilitate the general consumers.
Similarly, domestic consumers of electricity would be exempted from sales tax on domestic consumption of electricity. Federal Excise Act 2005 shall replace the erstwhile Central Excise Act 1944.
