PESHAWAR (Kashifuddin Syed): As part of the fiscal strategy for the upcoming year at both the federal and provincial levels, plans have been developed to eliminate long-standing tax exemptions in the former tribal districts and the Malakand division.
According to sources, the government aims to gradually integrate these areas into the regular taxation system, which is expected to generate over Rs 45 billion in additional revenue annually.
For the first time, the proposed measures could expand the application of various federal and provincial taxes to goods manufactured in the former FATA and PATA, as well as to imports, electricity supply, and business activities. Specifically, an 18 per cent sales tax may be applied to certain industrial and commercial sectors, including the electricity supply sector.
The merger of the tribal districts with Khyber Pakhtunkhwa rendered the temporary tax incentives established in the 1990s outdated, prompting the formulation of a new policy. This new policy aims to meet national financial requirements, increase revenue, and broaden the tax base. Additionally, there are plans to introduce withholding taxes on imports and to tighten regulations for importers under the concessional system.
