Taxation

FATA, PATA: Tax, other exemptions approved by ECC

The Economic Coordination Committee (ECC) of the Cabinet on Thursday, hours before the expiry of the government’s tenure, approved tax and other exemptions for FATA and PATA, and re-lending terms for Pakistan Mortgage Refinance Company Limited (PMRCL).

A meeting of the ECC chaired by Prime Minister Shahid Khaqan Abbasi considered a proposal for allowing tax and other incentives for the next five years for the people of erstwhile Federally Administered Tribal Areas and (FATA) and Provincially Administered Tribal Areas (PATA) following the 31st Constitutional Amendment for their merger with Khyber Pakhtunkhwa.

The tax exemption allowed to FATA and PATA included; (i) exemption 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 Federal Board of Revenue (FBR) by September 30 2018; (ii) exemption from sales tax to the retailers to facilitate the general consumers;(iii) domestic consumers of electricity would be exempted from sales tax on domestic consumption of electricity; (iv) Federal Excise Act 2005 shall replace the erstwhile Central Excise Act 1944; (v) 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; (vi) exemption from all withholding taxes, except on salary; (vii) and any person seeking to set up new industrial undertaking is allowed exemption from income tax after the approval of the ECC.

The meeting also discussed the issue of revocation of Neelum-Jhelum surcharge and decided that the surcharge would end on achieving Commercial Operation Date (CoD) of the project.

The meeting approved re-lending terms for Pakistan Mortgage Refinance Company Limited (PMRCL) for the purpose of ensuring efficacy of the facility towards promoting low-cost/affordable housing in Pakistan.

As this was the last meeting of the ECC held a few hours before the completion of five-year tenure of the present government, Prime Minister Abbasi acknowledged contributions of the ECC members towards taking informed decisions in the larger public interests.

The secretary finance, on behalf of the ECC members, thanked the Prime Minister for his continued guidance and support.

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