In the federal budget for the fiscal year 2025-26, the government has officially ended tax exemptions for the Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA).

Federal Finance Minister Muhammad Aurangzeb announced that a phased sales tax will now be applied to goods produced in these regions. As part of the new taxation framework, a 10 percent tax rate has been proposed specifically for FATA.

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Capital Gains Tax and Dividend Rates Remain Unchanged in Budget 2025-26

This policy shift is aimed at expanding the tax base and integrating all regions into the national taxation system, aligning with broader efforts to improve fiscal discipline and economic formalization.