Govt to Take Fata Tax Exemptions Issue to IMF After PTI Talks

ISLAMABAD: The federal government has assured the opposition that Finance Minister Muhammad Aurangzeb will raise the proposed extension of tax exemptions for the former Fata and Pata regions with the International Monetary Fund, following a meeting between government representatives and PTI leaders at Parliament House on Friday.

The discussion came as lawmakers from the merged tribal districts voiced concern over the scheduled expiry of key tax concessions on June 30. The issue has become politically sensitive because the affected regions continue to face economic stress linked to years of conflict, displacement, weak infrastructure and delayed development after their merger with Khyber Pakhtunkhwa.

Federal minister Rana Sanaullah, who also advises the prime minister on political affairs, said after the meeting that the finance minister had committed to taking up the matter with the IMF. He indicated that the government would try to secure space for continuing the exemptions after consulting the lender, whose programme conditions remain central to Pakistan’s budget and revenue decisions.

The meeting was held in the finance minister’s chamber and included Minister for Kashmir Affairs and Gilgit-Baltistan Amir Muqam from the government side. PTI was represented by Asad Qaiser, Junaid Akbar and lawmakers from the former tribal areas, who pressed the government to recognise the special circumstances of those districts before allowing the tax relief to lapse.

Sanaullah said the opposition had earlier raised the matter with Prime Minister Shehbaz Sharif during the National Assembly session. According to him, the prime minister then directed senior government figures to meet PTI representatives and examine the demand, while Muqam had already been pursuing the issue because of its importance for Khyber Pakhtunkhwa and the merged districts.

The former Fata and Pata regions were merged into Khyber Pakhtunkhwa in 2018 under a major constitutional and administrative reform. Since then, the areas have received tax relief on certain business profits and gains, while other concessions, including sales tax exemptions for retailers, have been used to support economic activity in markets that remain vulnerable and underdeveloped.

The debate has intensified because tribal elders and local groups have warned against imposing taxes before the region receives the full benefits promised at the time of merger. Earlier this month, the Fata Loya Jirga opposed new taxation in the merged districts and warned of protest demonstrations across the seven tribal districts if exemptions were withdrawn without addressing local grievances.

The meeting also carried a wider political message. Sanaullah said dialogue was essential for democratic politics and repeated the government’s offer for broader talks with PTI, including the prime minister’s proposal for a Charter of Pakistan. He said the opposition had responded positively and was consulting internally before taking a final position.

Asad Qaiser said PTI was prepared for dialogue if it led to genuine democratic space, stronger parliament and an independent judiciary. He also raised concerns over budget measures, including proposed tobacco taxation, arguing that parts of the economy were already under stress because trade with Afghanistan remained suspended.

The next step will depend on how the IMF responds to Pakistan’s request and whether the government can balance lender expectations with political pressure from the merged districts. If the exemptions are extended, it could ease unrest in former tribal areas; if they expire, the issue may become another flashpoint in the federal budget debate and government-opposition negotiations.