The government has decided that the tax and duty exemptions granted to the erstwhile tribal areas will not be extended beyond June 30. The move is going to become part of the Budget 2024-25 documents especially the finance bill.

This decision was made by the relevant authorities and marks the end of a significant fiscal incentive that was put in place to promote economic growth and development in the region.

The erstwhile tribal areas were merged with the Khyber Pakhtunkhwa province of Pakistan in 2018 and were granted tax and duty exemptions for a specific period to encourage investment and spur economic activities in the region.

These exemptions were aimed at attracting businesses and stimulating job creation in the area, which had historically faced economic challenges.

However, with the approaching deadline of June 30, it has been decided that the tax and duty exemptions will not be further extended.

The revenue impact of the said measure is nearly Rs45 billion.

According to Business Recorder, the Federal Board of Revenue (FBR) has proposed a tax draft to withdraw exemptions for this tribal area.

The industrial fields including iron, steel, plastics, ghee, textile, and other industries in the erstwhile Federally Administered Tribal Areas/ Provincially Administered Tribal Areas have been given tax exemptions.

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During the budget of June 2023, the government decided to extend the sales and income tax exemptions for an additional year.

The government had decided to take back the exemption before 2024’s budget; however, the last date was decided to be June 30.