ISLAMABAD: Traders in Gilgit-Baltistan (GB) announced ending a two-month-long protest near the country’s border with China on Wednesday, after the federal government accepted their demands and announced significant tax exemptions for the region’s residents.
GB’s importers, exporters, small traders, customs clearing agents and members of the area’s local chamber of commerce launched a sit-in protest in late July at the Sost dry port. Protesters demanded the government exempt traders from taxes as the semi-autonomous region was a “non-tariff” area and therefore should be exempt from sales and income taxes.
The protest had brought trade between Pakistan and China via the northern Khunjerab Pass to a halt, with the movement of people also adversely affected. Prime Minister Shehbaz Sharif formed a committee on Aug. 17, headed by Energy Minister Sardar Awais Leghari, to resolve the crisis.
Federal Bureau of Revenue (FBR) Chairman Rashid Mahmood Langrial explained at a news conference that previously, duties and consumption taxes used to be collected from GB traders at the Sost port near the border with China.
“While there is no consumption tax for GB, we did not have a mechanism to ensure that the exemption is offered only to the local population,” Langrial told reporters at the news conference. He was flanked by Leghari, GB Chief Minister Hajji Gulbar Khan and Senator Saleem Mandviwalla.
“Under the new mechanism, sales tax, income tax and federal excise duty will no more be collected at the border, but custom duty and regulatory duty will still be collected,” he added.
Faizullah Faraq, GB chief minister’s spokesperson, told the media that the agreement would impact trade worth over Rs100 billion [$358.42 million] between Pakistan and China through the Sost dry port.
Speaking at the press conference, Mandviwalla said the prolonged protest had worried Pakistan and China.