PESHAWAR: The Khyber Pakhtunkhwa government has decided to formally ask the federal government to exempt Fata and Pata from federal taxes, including sales tax on electricity and retailers, income tax on salary, capital gains tax on property and agriculture income tax, for five years after their merger with the province.s
The decision was made during a consultative meeting attended by the provincial finance secretary, income tax chief commissioner, and Peshawar customs collector lately. The meeting was called in line with the suggestion of the federal government’s committee on Fata reforms.
On May 31 after the merger of Fata with KP, the federal cabinet had proposed a package of tax exemption for both Fata and Pata.
However, the committee on Fata reforms emphasised that the cabinet’s decisions required elaboration to avoid complication in near future and therefore, the KP government should put up recommendations about it after consultation among relevant departments.
The consultative meeting agreed that there was no issue on the federal excise duty levied on imports.
The participants said a few ghee mills in Pata approached the Peshawar High Court for exemption from FED but that was in the context of the now annulled Article 247.
They said no exemption might be granted on FED to provide a level-playing field to the local ghee industry.
The participants noted that owners of those ghee mills were reportedly not the bona fide residents of Pata.
The meeting also decided on the three months extension of the cutoff date for the provision of the data of the registration of non-customs paid vehicles in Fata and Pata.
It recommended that the registration data available with the civil administration up to June 30 immediately be shared with the Federal Board of Revenue, while for the remaining data be produced afterward but not more than seven days after the cutoff date.