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Tribal Traders Resist Tax Implementation Amid Economic Struggles

The Bara Traders Union and Tirah Insaf Traders Association have vowed to fight the tax imposition through all legal avenues.
by Shah Nawaz Afridi - 23 May, 2024 717
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For the past two decades, millions in the tribal districts of Pakistan have faced continuous loss and suffering due to terrorism and a deteriorating law and order situation. Many families have lived as refugees within their own country for years, and many still do. Amidst these ongoing challenges, a new threat has emerged in the form of tax enforcement, which local leaders argue is like asking a patient on a ventilator to get up and carry a heavy load.

Syed Ayaz Wazir, Chairman of Bara Traders Union, expressed his concerns in a special interview. He highlighted that Bara Bazaar was closed for nearly seven years due to the poor security situation and has yet to recover fully. Out of approximately 13,000 business units, only about 7,000 are operational, mostly roadside stalls, while many domestic markets remain deserted. Traders who have restarted their businesses by selling family valuables now face the daunting prospect of new taxes. Wazir warned that imposing taxes at this stage would be catastrophic for tribal traders, who are not prepared for such a financial burden and will resist strongly.

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Aslam Afridi, President of the FATA Steel Industry, also spoke to TNN about the government's tax plans. He noted that people in the tribal districts were not previously taxed on basic necessities like vegetables, fruits, and construction materials. Implementing taxes now would create additional social issues, such as property tax complications. With 90% of properties shared and lacking proper records, taxation would exacerbate existing problems. Afridi stressed that the already struggling factories, facing reduced production due to various issues, would suffer further. Taxation on raw materials, import and export, agriculture, shops, petrol pumps, and medical units would weaken the tribal districts' fragile economy even more.

Kashif Iqbal, President of the Jamrud Traders Union, criticized the decision to include tribal districts in the tax net after 75 years. He explained that the Federal Board of Revenue (FBR) plans to collect taxes on everything, including shops, houses, minerals, factories, and goods. Sales of goods will also be taxed, and non-custom-paid vehicles will be banned. The government also aims to tax the Malakand division, despite a historical non-taxation agreement from 1969.

The Bara Traders Union and Tirah Insaf Traders Association have vowed to fight the tax imposition through all legal avenues. They have threatened to close the Pak-Afghan highway indefinitely in protest if necessary. "Traders in these districts have restarted businesses by selling women’s jewelry. Those who used to give zakat are now eligible to receive it," they stated.

Hamidullah Jan Afridi, former federal minister for environment and a central leader of JUI, argued that the economically weak and highly unemployed tribal population cannot afford to pay taxes in this situation. He warned that imposing taxes could lead to increased extremism, as unemployment has been a root cause of extremism in the past. Afridi revealed plans to meet with the President of Pakistan to address this issue.

In response to a question, Hameedullah Jan Afridi suggested that the government should have invested Rs. 100 billion to help the tribal districts rebuild. He also disclosed that manufacturers in the tribal districts are considering moving their factories to Afghanistan due to the new tax pressures.