Khyber Pakhtunkhwa Chief Minister Sohail Afridi has written a letter to Prime Minister Shehbaz Sharif, urging him to reconsider the proposed withdrawal of tax exemptions for the merged districts (MDs) and Malakand Division. The move has sparked widespread public concern, and the KP Assembly has already expressed reservations over the proposal.
Provincial Government's Stance on Taxation
In his letter, Afridi stated that the provincial government supports a fair taxation system but emphasized that any policy changes must account for the unique socio-economic conditions of the merged districts and Malakand Division. He noted that these areas joined KP under a framework aimed at supporting their long-term development and integration.
Challenges Faced by KP
The chief minister highlighted that the province continues to bear significant responsibilities for maintaining law and order, counterterrorism efforts, rehabilitation of affected areas, and reconstruction of infrastructure. He described KP as the country's frontline province in the fight against terrorism, having suffered considerable human, economic, and infrastructure losses.
Economic Impact of Border Trade Closure
Afridi added that the closure of border trade with Afghanistan, along with underdevelopment, inadequate infrastructure, and energy shortages, continues to affect the region's economy. These factors, he argued, justify the retention of tax exemptions.
Purpose of Tax Exemptions
The tax exemptions for the merged districts and Malakand Division were introduced to promote investment, create employment opportunities, and accelerate economic development. According to Afridi, the socio-economic conditions that formed the basis for these incentives largely remain unchanged. Withdrawing the exemptions at this stage could discourage investment, slow economic recovery, and place an additional burden on local businesses.
KP Assembly Resolution
The KP Assembly unanimously passed a resolution urging the federal government to defer the proposed tax measures. Afridi appealed to the Prime Minister to postpone the withdrawal and retain existing incentives until there is clear improvement in the economic and development indicators of the region. He expressed hope that the federal government would make a positive decision in the larger public interest.
