The federal government is set to impose a 18% sales tax on goods made in erstwhile Federally-Administered Tribal Areas (FATA) in the upcoming budget.

According to a report in Business Recorder, the Federal Board of Revenue has already starting drafting changes to the law that would allow the new taxes to be imposed.

The government hopes to collect Rs45 billion in taxes through the measure. The amount could be even higher if the government removes income tax concessions given to the former FATA.

An exemption granted to former FATA and PATA region regarding import/ supply of goods and supply of electricity had been extended last year till June 30, 2025.

The federal government is set to present its budget in early June. Talks have been going on with the International Monetary Fund over the budget, which is expected to include a slew of new taxes.