Khyber Pakhtunkhwa Chief Minister Sohail Afridi has requested the federal government not to withdraw the proposed tax exemptions in the merged districts and the Malakand division, reported 24NewsHD TV Channel on Wednesday.
In a letter to Prime Minister Shehbaz Sharif, CM Afridi pleaded that the existing tax exemptions should continue until conditions justifying such exemptions have materially improved in Malakand and the merged districts.
The withdrawal of tax exemptions has received much criticism from the PTI-led KP government as well as traders in the region. Last week, the provincial government decided to formally communicate its concerns to the Centre through an official letter.
In the letter, dated July 6, CM Afridi held that the decision was taken despite the fact that the people of KP and their elected provincial government stand hand in glove at strengthening of Pakistan’s fiscal position through a fair and sustainable taxation system.
CM Afridi told the premier that the issue was not solely limited to taxation but rather against the commitments the federal government had made at the time of the merger.
CM Afridi contended that despite the province’s commitments to implement the merger, the commitments made by the Centre remained unfulfilled, which had placed “disproportionate financial, administrative and security responsibilities” on the KP government. He reiterated that commitments made by the Centre on allocations within the National Finance Commission (NFC) had also not been realised. The KP CM highlighted that KP was Pakistan’s frontline province in the fight against terrorism and went on to cite the sacrifices made by KP.
He also drew attention to the disruption of cross-border trade with neighbouring Afghanistan, which he said had reduced commercial activity in the border districts, thereby impacting their local economies that depend on such trade.
He further recalled that the tax exemptions were conceived as “transitional measures” aimed at promoting investment, industrialisation, employment, and economic integration in what he called historically disadvantaged regions.
He also highlighted that the KP Assembly had passed a resolution seeking the deferring of the proposed taxation measures until the prior commitments are fulfilled.
Concluding the letter, CM Afridi appealed to PM Shehbaz that it is requested in the interest of the people of KP that the proposed withdrawal of tax exemptions in the merged districts and Malakand Division may kindly be deferred and that the existing tax exemptions may continue.