ISLAMABAD - A parliamentary committee on Friday directed Federal Board of Revenue (FBR) to coordinate with relevant ministries to address the issues related to tax exemptions, which were announced for erstwhile FATA and PATA after 25th Constitutional Amendment.

The Senate Standing Committee on Finance and Revenue, which was chaired by Senator Farooq H Naek, has discussed the modalities of the implementation of Tax Relief Regimes announced for erstwhile FATA, PATA.

The government has given exemption from 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 FBR by 30th September 2018.

It has also exempted the FATA and PATA from sales tax to the retailers to facilitate the general consumers. Similarly, domestic consumers of electricity would be exempted from sales tax on domestic consumption of electricity. Federal Excise Act 2005 shall replace the erstwhile Central Excise Act 1944.

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.

The committee was informed that FBR has not notified the tax exemptions yet, which were announced on May 31.

The chairman of committee Senator Naek directed the committee to meet on 29th June and instructed member FBR to coordinate with the Ministry of Law and Justice, ECC and Cabinet Division to provide complete details regarding the issue. He asserted that no notification be issued unless this problem is resolved.

Discussing modalities of the implementation of Tax Relief Regimes announced by the government as promised during the passage of FATA, PATA and Malakand region merger Bill/25th Constitutional Amendment, the members of the committee asserted that in order to facilitate this war-ravaged region it was imperative that the government kept its commitment of giving tax exemptions to commercial enterprises in FATA/PATA and Malakand Division for a minimum of five years.  They stressed that all exemptions given in Article 247 of the Constitution be fully implemented.

While agreeing that the region would benefit from tax concessions, Senator Mohsin Aziz stressed the need for ensuring that this move promoted value addition and was labour intensive. He also stressed the need for concessional loans that would encourage the establishment of new enterprises.

He also asserted the need to discourage the growth of conversion industries to benefit residents of the area.

Senator Fida Muhammad recommended that a nine-member committee be formed to take up the issue of tax exemptions with the Ministry of Law and Justice so that residents of FATA/PATA and Malakand Division benefit from it.

The meeting commenced with consideration of a point of public importance raised by Senator Mirza Muhammad Afridi regarding utilization of Zakat Funds in the education and health sectors and details that revealed disbursement of those funds to FATA.

However, the matter was deferred since Secretary Ministry of Finance was not present. The committee took strict notice of this matter.

Discussing the issue of exemption to pensioners from filing tax returns on the public petition of Ghulam Abbas, the committee questioned Dr. Muhammad Iqbal, Member IR Policy FBR of the circumstances under which pensioners are taxed.

He revealed that under FBR rules pensioners are not taxed unless they possess taxable movable or immovable property; or if they accept other employment after retirement.

He further stated that the petitioner was not included in the tax list. The chairman of the committee, showed satisfaction and disposed off the petition; issuing directions for the petitioner to be informed of the decision.