ISLAMABAD: The government will restore all tax exemptions available to the people of Federally Administered Tribal Areas (Fata) and Provincially Administered Tribal Areas (Pata) in the next cabinet meeting, Chairman Federal Board of Revenue (FBR) Dr Jehanzeb Khan told the Senate Standing Committee on Finance on Wednesday.

The committee, led by PPP Senator Dr Farooq Naik, initiated the discussions on tax measures, proposed in the supplementary budget as announced by Finance Minister Asad Umar last week, with no apparent breakthrough on the issue of non-filers.

Chairman FBR testified before the committee that the original status related to exemptions, especially related to income tax and sales tax, will be restored in letter and spirit. “We will submit a summary to the cabinet in this regard,” Mr Khan said.

But, Senator Khanzada Khan reminded the chairman that the tribals will not accept any change in the status of taxes in the tribal areas. However, the chairman assured the senators that, as per law, the status will be restored at the level of pre-mergers.

At the outset of the meeting, opposition senators, led by Haroon Akhtar Khan, Dr Musadiq Malik of PML-N and Talha Mehmood of JUI (F), questioned the government’s move over the retrospective implementation of the revised slabs.

These senators suggested to implement the new tax slabs for business individuals and salaried class from the date when the president signed the amended bill. Only PTI Senator Mohsin Aziz opposed this move.

On the committee chairman’s recommendation, the issue was resolved through voting and majority senators recommended to implement the new rates for the remaining nine months of the current fiscal year to avoid legal litigation, which will start from the date of signing the bill.

State Minister for Revenue Hammad Azhar was not happy with the senators’ move and observed that the issue was about the legality of the tax. He said that after presentation from the law division, it has become clear now that it is legal to implement the revised slabs retrospectively from July 1.

He went on to say that parliament has the power to grant retrospective effect to any decision.

Another issue, which came under discussion with respect to non-filers being allowed to purchase and register vehicles and properties in the country.

Published in Dawn, September 27th, 2018