The federal government has decided to impose an 18% sales tax on goods manufactured in the former tribal areas (ex-FATA/PATA) in the upcoming federal budget for fiscal year 2025-26.
According to a news report, the withdrawal of the sales tax exemption would generate over Rs45 billion in additional revenue for the government during FY25-26. The revenue impact could increase further if income tax concessions for these areas are also withdrawn.
The Federal Board of Revenue (FBR) is currently working on the necessary legal changes in response to court orders and relevant laws.
Under the Finance Act of 2024, the exemption for ex-FATA/PATA on the import and supply of goods and electricity was extended until June 30, 2025.Â
However, the exemption on imports will now require the presentation of a pay order instead of a post-dated cheque, with the pay order to be released upon submission of consumption or installation certificates from the concerned commissioner within six months.
