SOHAIL SARFRAZ

ISLAMABAD: The government has decided to impose 18 percent sales tax on goods manufactured in erstwhile tribal areas in the federal budget (2025-26).

Sources told Business Recorder that the withdrawal of sales tax exemption would generate over Rs45 billion during 2025-26. The revenue impact will be higher in case income tax concessions are also withdrawn for the said areas. The Federal Board of Revenue (FBR) is drafting the necessary legal changes in light of court orders and relevant provisions of law.

Through Finance Act, 2024 exemption available to ex-FATA/PATA (import/ supply of goods and supply of electricity) was retained till June 30, 2025.

However, the exemption on import shall be available subject to presentation of pay order instead of post-dated cheque which would be released on furnishing (within six months) of the consumption/installation certificates issued by the concerned Commissioner.