ISLAMABAD: The Economic Coordination Committee Thursday approved tax exemptions and incentives for the people of erstwhile FATA and PATA for the period of five years after the passage of landmark 31st Constitutional Amendment.

The committee which met here at Prime Minister’s Office with Prime Minister Shahid Khaqan Abbasi in chair, approved exemption of income tax on profits and gains of existing businesses conducted by individuals for a period of five years. These businesses however need to be registered with FBR by September 30, 2018, the committee said.

It approved the exemption from sales tax to the retailers to facilitate the general consumers, besides exempting the domestic consumers of electricity from sales tax on domestic consumption of electricity.

According to the ECC, the Federal Excise Act 2005 would replace the erstwhile Central Excise Act 1944.

It allowed the use of non customs paid vehicles in erstwhile FATA/PATA for a period of five years ending on June 30, 2023. However, these vehicles would not be allowed to cross over to other areas of the country. On the expiry of the five years’ relaxation period, the vehicles would be regularized on payment of leviable duty and taxes.

The meeting granted exemption from all withholding taxes, except on salary. Any person seeking to set up new industrial undertaking would be exempted from Income Tax subject to prior approval of the ECC.

The meeting discussed the issue of revocation of Neelum Jhelum surcharge and decided that the surcharge would end on achieving Commercial Operation Date (CoD) of the project.

The ECC also approved relending terms for Pakistan Mortgage Refinance Company Limited (PMRCL) for the purpose of ensuring efficacy of the facility towards promoting low cost housing in Pakistan.

At the conclusion of the meeting, the prime minister appreciated valuable contributions of the ECC members towards taking informed decisions in the larger public interests.

Secretary Finance, on behalf of the ECC members, thanked the prime minister for his continued guidance and support.