Government to take Fata, Pata tax exemption extension issue to IMF after PTI meeting

ISLAMABAD: The government on Friday told the PTI it would raise with the International Monetary Fund the matter of extending tax exemptions for the merged districts of the former Fata and Pata regions, following a meeting between leaders from both sides at Parliament House.

Federal Minister Rana Sanaullah, who also serves as the prime minister’s adviser on political affairs, said the meeting took place in the chamber of Finance Minister Muhammad Aurangzeb after PTI members had raised the issue in the National Assembly with Prime Minister Shehbaz Sharif earlier in the day. According to Sanaullah, the prime minister then directed him, Aurangzeb and Minister for Kashmir Affairs and Gilgit-Baltistan Amir Muqam to meet the opposition delegation.

The government side was represented by Aurangzeb, Sanaullah and Amir Muqam, while the opposition delegation included Asad Qaiser, Junaid Akbar and PTI members of the National Assembly from the erstwhile Fata. Speaking to reporters after the meeting, Sanaullah said the opposition had voiced concern over the expiry of tax exemptions for the former Fata and Pata on June 30.

He said the finance minister had assured the opposition that he would take up the matter with the IMF in an effort to secure an extension. Sanaullah added that Muqam had already been working on the issue and said he hoped the exemptions would continue after the lender was taken into confidence.

Tax exemptions and regional concerns

The former Fata and Pata, which were merged into Khyber Pakhtunkhwa in 2018, currently enjoy income tax relief on profits and gains from existing businesses run by individuals. The regions also benefit from other concessions, including sales tax exemptions for retailers.

During the budget debate in the National Assembly on Tuesday, Amir Muqam had called for the continuation of the tax relief, saying the former Fata and Pata still faced economic difficulties because of years of conflict and displacement.

Earlier this month, the Fata Loya Jirga opposed the imposition of any taxes in the merged tribal districts, saying such a step would be unconstitutional and illegal while a case against the Fata-KP merger remains pending before the Supreme Court. It also warned of protest demonstrations across all seven tribal districts over the issue.

Political dialogue also discussed

Sanaullah said the two sides also discussed broader political matters, with the government delegation stressing the importance of talks. He said Prime Minister Shehbaz Sharif had repeated his offer for dialogue and for signing a Charter of Pakistan, and described the opposition’s response as positive. According to him, PTI members said internal consultations were continuing and that the party would make a decision soon.

He also said the government delegation appreciated the opposition’s support for the resolution unanimously passed by the National Assembly earlier in the day, which praised Pakistan’s leadership role in the US-Iran peace agreement.

On PTI founder Imran Khan’s health, Sanaullah said the former prime minister, who is in Adiala jail and undergoing treatment for an eye ailment, was being given the best treatment available in Pakistan. He added that Khan was in judicial custody and could only be released through the courts.

Commenting on the tense situation in Azad Jammu and Kashmir, Sanaullah said the heinous conspiracy to create unrest and disrupt the freedom movement for a free occupied Kashmir had been brought under control. He also expressed hope that the slight interruption in supply chains would be resolved within a week.

For the PTI, Asad Qaiser said the opposition was ready to sign a Charter of Democracy provided it ensured what he called a level playing field for all. He said there should be no political vendetta, the judiciary should be independent and parliament should be strengthened. Qaiser added that the two sides had also discussed the proposed budget and that the opposition had presented its concerns to the finance minister.

He specifically referred to PTI’s reservations over a proposed tax on tobacco and said certain measures would damage an already weakened economy at a time when trade with Afghanistan remained suspended. In response to a question, Qaiser said the meeting had been held at the desire of both the government and the opposition.