Tax exemption ends for ex tribal areas

KPRA seeks compliance, support from departments

PESHAWAR:

The tax exemption for erstwhile FATA and PATA expired on October 31, 2023, with no sales tax exemption on services to merged districts and PATA thereafter, according to Fouzia Iqbal, Director General of the Khyber-Pakhtunkhwa Revenue Authority (KPRA).

During a visit to the offices of Secretary Irrigation Muhammad Tahir Orakzai and Secretary Mines and Minerals Development Department Mutahir Zeb, Fouzia Iqbal and her team sought support and cooperation for tax compliance.

In discussions with both departments, the DG KPRA emphasized the need for data sharing and tax compliance in projects.

Specifically, she highlighted the requirement for leaseholders’ data and full sales tax compliance in royalties and heavy machinery contracts.

“We pledge our full support to KPRA as we consider it our own institution,” stated Mutahir Zeb, urging his staff to provide leaseholders’ data and ensure tax payment from all projects.

Muhammad Tahir Orakzai, formerly DG of KPRA, expressed satisfaction at the authority’s growth and pledged support from the Irrigation Department, promising full tax compliance once funds are released.

Addressing concerns about misclassification of taxes, the DG KPRA highlighted the importance of ensuring KPRA’s sales tax on services is correctly accounted for, separate from federal accounts.

She further informed that the exemption to erstwhile FATA and PATA has expired on October 31, 2023 and there is no exemption from sales tax on services to FATA and PATA after that.

“It is a pleasure for me to see that KPRA is expanding and thriving,” Orakzai said, adding that he and his team will be available for any support to KPRA and will make sure of complete tax compliance once his department resumes work on projects after release of funds from K-P Finance Department.

Fauzia informed the secretary that mostly due to the misclassification of taxes the KPRA sales tax on services is submitted in the federal government’s accounts which needs to be controlled.

Published in The Express Tribune, April 24^th, 2024.