Decision to impose tax in Gilgit-Baltistan deferred

GILGIT (ET): The federal government has deferred a decision on levy of corporate tax in Gilgit-Baltistan (G-B) on the request of G-B government.

“The prime minister has accepted the request of G-B Chief Minister Mehdi Shah for delay in enforcement of the tax,” a source said.

“In a meeting, Shah pressed the prime minister to award G-B’s share in the National Finance Commission (NFC) award before imposing the tax,” the source said, adding Gilani assured the chief minister that G-B would be given its share in NFC in due course of time and with necessary amendments in the Constitution.

“Shah then requested the prime minister to defer imposition of the tax by the time NFC issue is settled,” the source said, adding the prime minister accepted the request.

The Gilgit-Baltistan government had earlier announced that it would impose corporate tax on all such businesses whose income is over Rs0.3 million. It had also decided to bring the employees earning more than Rs50,000 per month into the tax net to give a boost to revenues of the government.

However, the decision triggered a fierce reaction from the region as not only nationalist parties but also politicians within Pakistan Peoples Party (PPP) opposed it, terming it a conspiracy against PPP’s government.

G-B Finance Minister Mohammad Ali Akhtar was one of the politicians who openly resisted the tax, saying it was a ploy to defame the government. Nationalist leaders including Nawaz Naji, a lawmaker, argued that taxing G-B was illegal, since the region was not constitutionally Pakistan’s fifth province.

According to G-B Public Accounts Committee Chairman Muhammad Ibrahim, the G-B government could generate nearly Rs10 billion from the tax on the corporate sector, registered firms, corporations and salaried class.

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