Minister urges extension of tax exemption for Ex-FATA, PATA, highlighs development challenges

ISLAMABAD, (APP - UrduPoint / Pakistan Point News - 23rd Jun, 2026) Federal Minister for Kashmir Affairs, Gilgit-Baltistan and SAFRON, Engineer Amir Muqam, on Tuesday urged the government to extend tax exemptions for the merged districts of former FATA and PATA, arguing that imposing additional taxes without fulfilling development commitments would place an unjust burden on residents already grappling with insecurity and underdevelopment.

While talking to media outside ParliamentHouse, the minister recalled that the former FATA was merged with Khyber Pakhtunkhwa in 2018 under constitutional guarantees that the region would remain exempt from taxation for five years with federal and provincial governments commitments related to development, infrastructure, peace and public welfare.

He said those promises remained largely unfulfilled even after the initial exemption period expired. Keeping in view the prevailing situation, he appreciated Prime Minister Shehbaz Sharif for approving successive extensions of the tax exemption until June 30, 2026.

Referring to concerns raised by industrialists from Punjab and Sindh regarding the sales tax exemptions on imported raw materials used by industries in ex-FATA and PATA, Amir Muqam said a committee led by him and Rana Sanaullah held extensive consultations with all stakeholders. As a result, a 10 percent sales tax was imposed on imported raw materials, with a provision for gradual annual increases of 2.5 percent.

The minister said the current proposal to broaden taxation to traders and ordinary citizens in the merged districts was unjustified, until the promised development projects and financial assistance are fully implemented.

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He said a cross-party delegation, including lawmakers from both the treasury and opposition benches, recently met Finance Minister Muhammad Aurangzeb and presented a united case for extending the tax exemption. The delegation highlighted the region's fragile law and order situation, lack of development and economic hardships, urging the government to avoid imposing additional taxes.

Highlighting the development backlog, Amir Muqam said several major infrastructure projects approved during the tenure of former Prime Minister Nawaz Sharif, including expressways connecting Chakdara with Dir, Chitral, Kalam and Bisham, were either cancelled or significantly delayed after the change of government in 2018. He noted that despite an estimated cost exceeding Rs100 billion, only Rs1 billion had been allocated for the Bisham-Khwazakhela Expressway, making timely completion unlikely.

He also criticized the Khyber Pakhtunkhwa government, alleging that it had failed to allocate adequate resources for the development of both ex-FATA and PATA despite receiving funds in their name.

Reiterating his appeal, the minister urged Prime Minister Shehbaz Sharif, President Asif Ali Zardari, Finance Minister Muhammad Aurangzeb and other stakeholders to extend the tax exemption period.