Khyber Pakhtunkhwa Chief Minister Sohail Afridi has written to Prime Minister Shehbaz Sharif, urging the federal government to reconsider its proposed decision to withdraw tax exemptions for the merged districts and Malakand Division.

In his letter, the chief minister said the proposed withdrawal of tax exemptions has caused widespread public concern, noting that the Khyber Pakhtunkhwa Assembly has already expressed reservations over the move through a unanimous resolution.

Sohail Afridi said the provincial government supports a fair and equitable tax system, but the real issue is not taxation itself. Rather, he said, it is the federal government's failure to fulfil the financial, constitutional and institutional commitments made at the time of the merger of the former tribal districts with Khyber Pakhtunkhwa.

He stated that the federal government has yet to provide the province with the agreed National Finance Commission (NFC) share for the merged districts, leaving Khyber Pakhtunkhwa to bear the financial burden of the merger on its own.

The chief minister said the province, as Pakistan's frontline region in the fight against terrorism, has suffered significant human, economic and infrastructure losses and continues to spend heavily on law and order, counterterrorism, rehabilitation of affected areas and reconstruction of damaged infrastructure.

He added that border trade disruptions with Afghanistan have severely affected the economy of the merged districts, while underdevelopment, inadequate infrastructure and energy shortages continue to hinder economic growth.

Sohail Afridi said the tax exemptions were introduced to promote investment, create employment opportunities and support economic development in the merged districts and Malakand Division. He maintained that the socio-economic conditions that justified the exemptions still largely exist.

Also Read : Swat's Tax Dispute: The Truth Behind the Alleged 100-Year Tax-Free Promise

He warned that withdrawing the exemptions before fulfilling federal commitments would discourage investment, slow economic recovery and place an additional burden on local businesses.

The chief minister also noted that although the federal government had formed a committee, headed by the federal minister for inter-provincial coordination, to review the proposed tax measures, it failed to reach any final recommendations despite holding several meetings.

He criticized the decision to withdraw the exemptions without consulting the provincial government and local stakeholders, warning that such a move could also have negative implications for peace and security in the sensitive border regions.

Sohail Afridi urged the federal government to immediately defer the proposed withdrawal of tax exemptions and maintain the existing relief until the commitments made at the time of the merger are fulfilled and the region's socio-economic conditions improve. He expressed hope that the federal government would honour its promises and take a positive decision in the interest of the affected areas.