The National Assembly Standing Committee on Finance, chaired by Syed Naveed Qamar, discussed the recently imposed 10% sales tax in Khyber Pakhtunkhwa’s newly merged districts on Tuesday.
During the meeting, Federal Board of Revenue (FBR) Chairman Rashid Langrial informed the committee that Prime Minister Shehbaz Sharif had formed a committee to review the sales tax issue in these districts.Â
The committee, headed by the PM’s Adviser on Political Affairs, Rana Sanaullah Khan, is expected to address concerns raised by industries in other regions facing competition from the tax exemption previously enjoyed by businesses in the merged areas.
Langrial explained that the exemption had allowed industries in the merged districts to benefit from an 18% cost advantage, which led to issues for businesses in other parts of the country. As a result, the government decided to impose a 10% sales tax in the current fiscal year. The decision to revisit the tax matter follows substantial pressure, and it is expected to attract attention, particularly from the International Monetary Fund (IMF).
The committee also discussed the FBR’s proposal for tax differential subsidies to mitigate the impact on residents of the merged districts. However, this proposal was rejected by the committee members.
The issue had previously been referred to the Finance Standing Committee by the Public Accounts Committee after trade bodies raised concerns about the new tax structure.
