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FBR announces to exempt Malakand division from all kinds of taxes up to year 2023

FBR announces to exempt Malakand division from all kinds of taxes up to year 2023

ISLAMABAD: Federal Board of Revenue (FBR) has announced that Malakand division has been exempted by the government from all kinds of taxes up to the year 2023.

No income tax is being withheld on electricity and telephone bills of individuals domiciled in aforesaid areas of Malakand division or company and association of persons residents of these areas but the sales tax on electricity is chargeable on the electricity supplied to the division.

FBR stated that sales tax on services is a provincial subject and the same is payable under the provincial law. FBR has also informed that no exemption of federal excise is available to Malakand division. The Federal Excise Act, 2005, and the duties levied therein are applicable to aforesaid areas after the omission of Article 247 of the constitution through the aforesaid amendment.

FBR has also explained that districts of Chitral, Dir, Swat and Malakand protected area, as falling in Malakand division, have been granted exemption from sales tax till 30th June, 2023 on supplies originating and terminating in such areas.

This exemption has been granted vide SRO 1212(1)/2018, while under the SRO. 1213(I)/2018 income tax  exemptions have been provided under the Income Tax Ordinance, 2001, till 30-06-2023 for the aforesaid areas of Malakand division. FBR also clarified that prior to the 25th Constitutional Amendment, the Customs Act, 1969 was applicable in the division in light of the Provincially Administered Tribal Areas of the North-West Frontier Province (Application of Laws) Regulation, 1975.

Presently, the Customs Act, 1969 is applicable by virtue of the aforesaid amendment. As such no exemption from application of Customs Act, 1969 has been specifically granted to Malakand division.