The Federal Board of Revenue (FBR) has decided to implement an 18% sales tax in the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA).

This measure aimed at standardizing the tax regime across Pakistan, will apply to both goods and services in these regions, ending a long-standing tax exemption.

As per Business Recorder, the FBR’s move follows the expiration of a five-year tax holiday granted after the merger of these areas with Khyber Pakhtunkhwa under the 25th Constitutional Amendment.

The FBR issued instructions to its field formations to ensure implementation of the sales tax in these areas from July 1, 2024.

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The tax will now be levied in line with the rest of the country, affecting businesses and consumers alike.

Local traders and business associations voiced their concerns over the decision, warning of its potential economic impact on already fragile markets in the region.