Despite exemption, tribal districts still paying power tax

Senator says tribal districts exempted from paying taxes for five years

ISLAMABAD: The chairman of the Senate Standing Committee on States and Frontier Regions (SAFRON) said on Wednesday that the Federal Board of Revenue (FBR) chairman was a chartered accountant and unaware of constitutional matters.

Chairing a meeting of the committee, Senator Taj Muhammad Afridi noted that the residents of erstwhile tribal districts were exempted from paying taxes for five years following their merger with Khyber-Pakthunkhwa (K-P).

Senator Shammim Afridi regretted that the matter of tax exemption for the tribal districts remains unresolved despite the passage of a year since the merger.

Tribal Electricity Supply Company (Tesco) Chief Executive Officer Mian Muhammad Hamid informed the committee that the power utility was paying Rs4 billion to the FBR in tax.

He added that Tesco had not received any orders in writing for tax exemption but the company was still providing relief to consumers.

"Tesco won’t be able to continue this if the FBR keeps on collecting tax from the company.”

The committee asked a representative of the FBR about the tax exemption on imports and electricity. The FBR official responded that there were some procedural delays on part of their office due to the changes in management.

He added that the budget documentation was in process and an interim order would be released to provide relief on imports, however, tax on electricity was still being collected.

The committee summoned the FBR chairman, the finance secretary and water and power officials to its next meeting for a briefing on the matter.

It appreciated the role of the Tesco management in ensuring the supply of eight hours of electricity to the tribal districts especially at Sehr and Iftar timings during the holy month of Ramazan.

SAFRON Secretary Muhammad Aslam informed the committee that an amount of Rs10 billion had been released to the tribal districts ahead of the National Finance Commission (NFC) Award on the special directives of the Prime Minister's Office.

Overall, he said, an amount of Rs41.7 billion had been released to the tribal districts including funds for the salaries of Khasadar and Levies forces.

“From the next fiscal year, SAFRON will no longer play a role in financial matters as the K-P government will receive finances in its account from the federal government,” he added.

K-P Planning and Development Department Chief Economist Zaheerud Din gave a detailed briefing on the allocation of funds for the Annual Development Programme (ADP) 2018-19.

He said 70% of the amount was allocated for ongoing projects and 30% for new ones.

The committee directed the Planning and Development Department to give a detailed briefing on the ongoing projects in the next meeting. The committee observed that ongoing projects should be completed at the earliest so that the authorities could focus on the upcoming schemes.

Committee members Hidayat Ullah and Najma Hameed also participated in the meeting. Senator Khanzada Khan attended the meeting on special invitation.