Govt plans to end exemptions, tax tribal areas

Pakistan’s top tax machinery is working on several proposals to eliminate tax exemptions worth billions of rupees in the Budget 2024-25 as prerequisites to secure an agreement with the International Monetary Fund on a new bailout package, Dawn learnt from official sources on Thursday. The Federal Board of Revenue (FBR) has prepared a document for tax exemption withdrawal based on internal workings. It focuses on sales tax exemptions and tax exemptions available to people in former federally administered tribal areas and provincially administered tribal areas while paying little attention to immovable properties, undocumented non-corporate businesses, the transportation sector, and construction businesses. Well-placed sources in the FBR told Dawn the tax exemption withdrawal is primarily focused on sales tax. The overall amount of sales tax exemption anticipated by the FBR is more than Rs1.3 trillion. Most tax exemptions are for petroleum, food, pharmaceutical, and milk products.