Govt Considers Extending Tax Exemptions For Merged KP Districts in New Budget

The federal government in its recently concluded virtual talks with the International Monetary Fund (IMF) said that it was considering extending tax exemptions for the newly merged districts of Khyber Pakhtunkhwa in the next fiscal year, sources told ProPakistani. Sources from the Federal Board of Revenue (FBR) said a proposal to extend these exemptions in the new budget is currently under review. It would apply to imported machinery for the newly merged districts, which were previously part of the Federally Administered Tribal Areas (FATA). Businesses and factories in these regions would be exempt from income tax, sales tax, and Federal Excise Duty (FED), sources added. Sources said these tax exemptions are being considered due to the continued economic challenges in the region. These exemptions were set to expire at the end of 2023, but the proposal now suggests extending them for another year. The IMF had recommended ending the tax exemptions for the former FATA regions, but the government is leaning towards maintaining them for one more year. There is also a proposal to set up a checkpost on the borders of ex-FATA. Sources said this would help ensure that tax-free machinery intended for development in the merged districts does not enter the rest of the country without appropriate duties.