Senate Seeks FBR Report on FATA, PATA Tax Exemptions

A Senate sub-committee has raised concerns over the Federal Board of Revenue’s (FBR) administration of tax exemptions available to industries operating in the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA), directing the tax authority to submit comprehensive records relating to consumption certificates, tax returns, and pending litigation.

During a meeting chaired by Senator Saifullah Abro, the committee reviewed the FBR’s efforts to address tax evasion and examined the issuance and monitoring of consumption certificates issued to businesses benefiting from tax exemptions in the designated regions.

According to data presented by the FBR, the ghee industry recorded the highest number of tax-related cases over the past six months, with 26 cases involving approximately Rs57.586 billion. The steel sector accounted for eight cases valued at Rs7.517 billion, while the textile sector faced 11 cases involving Rs5.920 billion. The plastic industry recorded three cases worth Rs1.267 billion, whereas the food sector was linked to 15 cases with a combined value of Rs1.259 billion.

During the proceedings, Senator Saifullah Abro questioned how textile imports valued at Rs154 billion, brought into Pakistan under tax exemption provisions, could have been fully consumed within the erstwhile FATA region. He observed that the federal government already allocates nearly Rs100 billion annually for the area's development and stressed that tax concessions should not be exploited for unintended purposes.

Responding to the committee, FBR officials stated that pay orders amounting to only Rs5.9 billion associated with the textile imports had been encashed to date, while imports worth approximately Rs145 billion remain under examination.

The officials further informed lawmakers that several importers had obtained stay orders from the Peshawar High Court, which directed the FBR to provide the affected parties with an opportunity to be heard before taking further action.

Following the discussion, the committee instructed the FBR to submit a detailed report covering the issuance and encashment of pay orders, their present status, and the complete record of related cases currently pending before the Peshawar High Court.