The Federal Board of Revenue (FBR) has announced exemption from payment/recovery of withholding taxes along with monthly electricity bills from commercial and industrial consumers located in the war affected areas of NWFP up to June 30, 2011.
However, the manufacturers and suppliers of cement, sugar, beverage and cigarettes operating in these areas would not be entitled to tax relief package, sources added. Sources told Business Recorder on Monday that the FBR has issued an income tax circular for announcing fiscal relief to rehabilitate the economic life in NWFP, Federally Administered Tribal Areas (Fata) and Provincially Administered Tribal Areas (Pata). The sales tax relief has already been provided to these affected areas through a sales tax general order.
Under the fiscal relief package, the cases of commercial as well as industrial consumers located in the most/moderately was affected areas shall be exempted from recovery/payment of withholding taxes along with monthly electricity bills. This exemption shall be available up to June 30, 2011. Most affected areas covers Malakand Agency and districts of Swat, Buner, Shangla, Upper Dir, Lower Dir, Hangu, Bannu, Tank, Kohat and Chitral. Moderately affected areas included districts of Charsadda, Peshawar, DI Khan, Batagram, Lakki Marwat, Swabi and Mardan.
The scheme shall be known as "Scheme for Fiscal Relief to Rehabilitate the economic life in the areas most affected and moderately affected from war on terror in NWFP, Fata and Pata" under the Prime Minister's Special Economic/Incentive package for the NWFP, Fata and Pata. This scheme shall be applicable to the most affected and moderately affected areas.
Under this scheme, waiver of the entire amount of penalty and default surcharge leviable in cases pertaining to the most/moderately was affected areas shall be available in cases where the principal amount of income tax is paid by June 30, 2010.
Under this scheme, recovery of the outstanding arrears of income tax in cases pertaining to these areas/districts shall be allowed through easy instalments over a period of 3 years (upto June 30, 2012) on case to case basis and on the agreeable terms and conditions.
The cases of exports originating from the most affected and moderately affected areas shall be exempt from withholding income tax leviable on exports, upto June 30, 2011. No such waiver/exemption shall be available in the cases of manufacturers and suppliers of cement, sugar, beverage and cigarettes. This scheme shall be applicable from January 20, 2010, sources added.