Month: May 2011

Gilgit-Baltistan: Myths About Taxation in Pakistan

Posted on Updated on

As budget season approaches, a number of myths about taxation in Pakistan can be dispelled using publicly available resources.  A reading of the World Bank’s comprehensive 2009 study “Pakistan Tax Policy Report: Tapping Tax Bases for Development”, and data accessed from the websites of the Federal Board of Revenue (FBR), State Bank of Pakistan, and other official sources do the job in exposing some myths about taxation in Pakistan.

Myth No. 1:  The economy cannot take the burden of more taxation

Pakistan collects a relatively small proportion of its GDP as tax compared to most other countries at its level of development. Our current tax-GDP ratio is under 12 per cent, while India’s approaches 18 per cent. There is an argument that during an economic down-turn government should tax less and spend more through increasing its borrowings. This works well when borrowing is inexpensive and debt levels are low.

Myth No. 2:  Government does not live within its means

Governments have been successful in raising sufficient revenues to meet expenditures other than debt repayments. Debt repayment tips us into a budget deficit. The longest stretch of fiscal irresponsibility was in the 1980s when deficits and debts piled up. Since the mid-1990s the only major case of non-debt repayment spending exceeding revenues was in 2007-2008. This means that the Pakistani state has mostly lived within its means for nearly two decades, but has not raised sufficient revenue to pay off earlier debts. Living within means does not mean, of course, that Pakistan spends what it ought to on education, health, social protection or infrastructure.

Myth No. 3:  Salaried classes bear the brunt

Taxes on salaried incomes account for fewer than 2 per cent of FBR collections. Non-salaried income taxes including withholding taxes make up 10 per cent of taxes, corporate income tax 26 per cent, sales tax 30 per cent, custom duties 14 per cent and federal excises 9 per cent. It is true that salaried formal sector employees fall more easily into the tax net than others, and that there is a need to expand tax registration and compliance among the self-employed. The fact that salaried classes are over-represented among newspaper readers probably contributes to the disproportionate expression of their outrage.

Myth No. 4:  Agriculture is the favoured sector

Agricultural income is not exempt from taxation. It is a provincial tax and is poorly implemented as are most provincial taxes, such as property taxes. The weakness of provincial tax administration is a key constraint to taxing agriculture and this needs fixing anyway, particularly since the 18th Amendment. Agriculture is subsidised in most countries, hence international comparisons of the burden of taxation on agriculture typically measure the element of net subsidy. Pakistan has historically provided one of the lower rates of net subsidy on its agricultural sector – lower than Indonesia, India, Malaysia and China.

Myth No. 5:  Government milks businesses for cash

Corporate income tax contributes over a quarter of total FBR collection and transactions conducted by big firms account for a large proportion of indirect tax collection. But the World Bank study which estimated that non-compliance leads to a loss of 800 billion rupees to the exchequer also showed that over half this loss was due to corporate income tax evasion. Two-fifths of the firms under the Securities and Exchange Commission of Pakistan are not registered with the FBR. Textiles which enjoy exemption from indirect taxes on inputs make a negligible contribution to the exchequer. They join traders to oppose sales tax reforms which will require documentation of transactions, which in turn might improve income tax enforcement. Very big businesses which are already tax agents support such tax reforms.

Myth No. 6:  Military governments are better at raising revenues than civilians

The only period of sustained rise in the tax-GDP ratio was in the 1970s under Bhutto, which was followed by a dramatic decline from 1980 onwards under Zia. Benazir’s second government registered rises in tax-GDP ratios which were not sustained. The tax-GDP ratio reversed direction every two years under Musharraf. The present civilian government has overseen rising tax-GDP ratios thus far. There is no evidence of military government performing better than civilians – in fact they seem to perform a little worse.

The writers work with the Collective for Social Science Research based in Karachi

Courtesy: The Express Tribune

Gilgit-Baltistan:USAID to Build Two Hospitals in GB

Posted on

The United States Agency for International Development (USAID) is going to build a 97 bed hospital in Gilgit, the capital of Gilgit – Baltistan region. The project will be completed by October 2011. Another similar hospital will be built in Skardu later.

These plan were shared by a delegation of the USAID that called on CM Mehdi Shah here in Islamabad. Shah was also told that the hospitals will have their separate power-generation plants to ensure round the clock supply of electricity.

CM Shah expressed gratitude for the American investment in Gilgit – Baltistan and also promised to provide the 80 Kanal land for construction of the hospital.

USAID, which is an independent agency of the government of United States, assured Mehdi Shah that more projects will be launched in the region for improvement of health services.

Courtesy: Pamir Times

Gilgit-Baltistan: Declare GB a Free Trade Zone

Posted on Updated on

Already disaster stricken, traders of Gilgit-Baltistan (G-B) have demanded of the federal government to declare G-B a free trade zone.

GB’s trade solely depends on the Karakoram Highway (KKH), which connects Gilgit with China, but the trade route was cut off after a massive landslide at Attabad in Hunza on January 4, 2010, which left 23 kilometres of the road and a number of villages completely submerged under the artificial Attabad Lake. All forms of trade were severely affected and it is estimated that the region’s traders have suffered around Rs2 billion in losses since then.

Talking to The Express Tribune, G-B Chamber of Commerce and Industry’s (GBCCI) President, Javed Ahmed, said that subsequent disasters in G-B “ruined all businesses in the area” including trade, tourism and other economic activities, pushing people into extreme poverty and economic degradation. “The cost of business has doubled due to the boat services at Attabad Lake, substantially decreasing profit margins for businesses,” said the GBCCI president. He demanded that the government declare G-B a free trade zone by exempting Sost Dry Port from sales tax and custom duties in a bid to facilitate and compensate local traders.

He claimed that despite paying taxes and custom duties at Sost Port, traders are illegally charged custom duties at Dasu, Abbottabad and Haripur, while on their way to Rawalpindi, even though all such trade barriers had been abolished in 1998 on the directives of then Prime Minister Nawaz Sharif, he added.

He said that in the wake of 9/11, 2001 and with the prevailing law and order situation, G-B has rarely seen foreign tourists in the past decade, leaving tourism, another core source of income, in a state of disarray. He said that the local and the federal governments did not take prompt steps to restore the KKH, which resulted in disruption of all activities in the region.

He urged the government to introduce a compensation package for G-B similar to the one given in Swat and other disaster-stricken areas to revive the local economy. The compensation could include writing off of business loans, exempting traders from taxes and facilitating foreign investment in the area to harness its mineral, power and tourism sectors. To boost tourism, the government must ensure the expansion of airports, introduce all-weather flights and highlight the tourism potential of the area, he added.

Ahmed noted the dire need to establish an export processing zone in G-B to facilitate value addition for local products. He said that in the absence of an export processing zone, large quantities of fruits and vegetables are destroyed before reaching the market.

Besides, Ahmed said GBCCI had prepared a feasibility report for establishing a cement factory in G-B, but the project could not be initiated as the federal government could not invest Rs1 billion. He said the project will not only benefit G-B’s people, but will also reduce construction cost on Bhasha and other proposed dams due to the lower transportation cost between a local factory and the dam sites.

Courtesy: Express Tribune

Gilgit-Baltistan: Awards for Nature Conservation in Pakistan

Posted on

LAHORE – A ceremony was on Wednesday held to give away ‘Syed Asad Ali Conservation Award’ and ‘Living Planet Award’ to the individuals who have made exceptional contribution to nature conservation in Pakistan, at the Ali Auditorium of Ali Institute of Education. This year, Syed Yahya Shah hailing from Gilgit-Baltistan won the conservation award for working tirelessly to promote sustainable utilisation of natural resources in his area of influence with great success.
However, one of the recipients of ‘Living Planet Award’ was Ali Ijaz, an NCA graduate whose SGP-funded documentary ‘Missing Vultures’ has created waves the world over and has moved people to pay attention to the plight of this important species. Other recipients are Dr Khalil and Ms Nilofar from Department of Biological Sciences, Karakoram International University for their project titled ‘Capacity Enhancement in Nature Conservation of Academic Institutions on Snow Leopard Distribution in Gilgit-Baltistan and the Proper Ishkoman Development Organisation for the project undertaken for biodiversity conservation model project in Ishkoman valley and its replication in adjacent valleys of district Ghizer.
The ‘Living Planet Award’ is a symbol of recognition which is especially presented to those who have made outstanding contribution to the field of nature conservation. The title is awarded to those who excel in their WWF – Pakistan Small Grants Programme projects which have proved to be the forerunners of addressing particular environmental themes, hence protecting our natural capital.
These prestigious awards were given away by Sectoral Committee for Environment Convener and Nawaz League MPA Dr Saeed Elahi and revered philanthropist and industrialist Syed Babar Ali gave away these prestigious awards. The event was organised by WWF – Pakistan as part of the organisation’s commitment to rewarding excellence and innovation in conservation, environmental protection and sustainable development. A good number of people from all walks of life attended the ceremony.

Gilgit-Baltistan: Sculpture Making Training for Students at PNCA

Posted on Updated on

Islamabad: As many as 35 students from various educational institutions of the twin cities and amateur artists are being trained in making sculptures by experts at a five-day workshop at the Pakistan National Council of the Arts continuing till May 21.

The workshop has been organised by the PNCA with participation of budding male and female artists.

During the workshop, the participants will also be given opportunities to see the works of other sculptors both national and international through multi-media presentations, lectures, talk and question answer sessions, said the organisers.

The training has been organised for beginners in the field and various sessions of the workshop will expose them to the maximum in the sphere of sculpture and encourage them to take it forward and explore possibilities. Three experts including Sajjad Akram, Ayub Wali and Imran Hunzai are conducting the course with main focus on ‘Creating forms and shapes in Clay/Plaster, Fibre and Wood.’ The experts are also focussing on the theoretical and practical work to provide the participants with an opportunity to work and experience in varied mediums such as clay and plaster.

The experts will also be demonstrating their skills in wooden sculptures and will teach the basics of wood sculpting in 2-D and 3-D. According to them, the medium is not frequently practiced in Pakistan and students are not much encouraged to learn this skill as there were less institutions of such art in the country.

“The training has been planned to facilitate students and others interested in, to express their creative potential in this lesser explore medium,” the organisers said.

The students will be guided and trained with the academic requirements of an art student by making human head in clay and later through the application of moulding and casting procedure, they will complete the process of making final product (Head) in plaster of Paris. On last day of the workshop, the students will demonstrate their work and also be given certificates to acknowledge their skills.

Talking to this agency, PNCA Director General Tauqeer Nasir said that PNCA has increased its activities of training youth in different fields and practice the dying and less explored art forms through various short courses.

During last few months, a number of amateur artists, students and youngsters have been trained in diverse fields of visual and performing while PNCA also provided them a platform to demonstrate and practice their skills.

Sajjad Akram, a young dynamic sculptor and distinction holder from the Punjab University, currently associated with Fatima Jinnah Women University as a faculty member in Department of Sculpture shared his experience regarding the art of sculpture.

Ayub Wali, a young multi faceted artist from Gilgit/Baltistan and a graduate of NCA and Imran Hunzai, an eminent name in the sphere is a faculty member at NCA, Rawalpindi Campus are conducting the workshop.

These experts will guide the students in fibre glass, a medium commonly used these days for sculpting and making low and base relief and share expertise in the medium during the days of workshop.

Gilgit-Baltistan: Provincial Status Proposed for GB by PILDAT

Posted on Updated on

ISLAMABAD: Experts agreed that the current constitutional arrangements for Azad Jammu and Kashmir and Gilgit Baltistan should be reformed to give the same quantum of autonomy as provided to the four provinces in a forum ‘Proposed Constitutional Amendments in the Constitution of Pakistan 1973, for Empowerment of Azad Jammu & Kashmir and Gilgit Baltistan’, organized by Pakistan Institute of Legislative Development and Transparency (PILDAT) on Wednesday.

The forum was organized to initiate a dialogue on the proposed amendments in the Constitution of Pakistan so that the Azad Jammu and Kashmir and Gilgit-Baltistan enjoy equitable rights and facilities till the time a permanent settlement on the status of these regions is reached and the people of Azad Jammu and Kashmir get their right of self-determination as provided in the United Nations Security Council resolutions. The legislative forum was participated by a large number of analysts and subject experts.

Justice (Retd.) Syed Manzoor Hussain Gillani, Former acting Chief Justice of Supreme court AJ&K, presented his discussion paper on the proposed constructional reforms. He said that Azad Jammu & Kashmir and Gilgit Baltistan do not have any seats in the parliament of Pakistan or in the institutions established by the constitution for consultation and coordination between the federation and its component units, such as the Council of Common Interests (CCI), the National Economic Council (NEC) and the National Finance Commission NFC). He said that until a final settlement of Jammu and Kashmir in accordance with UN resolutions, the status of Azad Jammu and Kashmir and Gilgit Baltistan as separate entities within the State of Jammu and Kashmir, as well as the international status of the State as disputed territory whose final status is yet to be determined, should remain unchanged and the two territories should not be made provinces of Pakistan.

While analysing the proposed amendments, Mr. Mujib ur Rehman Shami, Editor in Chief Daily Pakistan, said that if the issue is just of Kashmiri people then we should accept Azad Kashmir and Gilgil Baltistan as separate States. “If we recognise AJ&K and G-B as provinces then we should give them equal number of seats in Senate of Pakistan” opined Mr. Shami. Discussing the effects of giving these States a provincial status, he said that by giving these regions a provincial status the Kashmiri people would lose dual right of votes. He believed that financial implications of such amendments should also be kept in mind.

After the presentation of Gillani, discussants gave their analysis on the amendments in detail. Raja Farooq Haider Khan, Former Prime Minister AJK, said the powers given in article 31(3) should be given to Pakistan government and the rest should be given to AJK government. He said that there is a dire need to bring people of AJK at par with other citizen of Pakistan. Afzal Shigri, Former IG police, believed that rights should be given to those people who want to join Pakistan and struggled for it. Gen (Retd. ) Muhammad Aziz Khan, Former CJCSC, was of the view that maximum autonomy should be given to AJK and GB. He said that most of the problems are of administrative nature rather constitutional. He believed that the actual problem lies in the functions of AJK Council.

Haroon Khalid, a politician from G-B, commented that Gilgilt Baltistan is strategically most important part of Pakistan; therefore this region should be given its due importance. S. M. Junaid, former Secretary, was of the view that AJK Council members didn’t ever have much interest in AJK affairs.

Earlier, Ahmed Bilal Mehboob, Executive Director PILDAT, while introducing the session said that the constitutional status of AJK and GB should be reviewed as constitutional status of the AJ&K and G-B region has been remained invisible in the mainstream political and constitutional structure of the country for almost half century.

Gilgit-Baltistan:Recognition as Constitutional and Integral part of Pakistan

Posted on Updated on

On the April 29, 2011, the founder of the ultra nationalist Balwaristan National Front, Nawaz Khan Naji, won the by-election in Gilgit-Baltistan’s Ghizer constituency at the expense of the Pakistan People’s Party and the Pakistan Muslim League Nawaz. The party is rumoured to favour maximum autonomy for the region, if not outright independence, and its rallying cry revolves around Gilgit-Baltistan being allegedly treated like a colony by Pakistan. Hence, unsurprisingly, the victory has sent shock waves across the political landscape, especially considering that the area is the hometown of the present Governor of the region and PPP representative, Pir Karam Ali Shah.

The result may have come as a shock to many in Pakistan, however, the fact is that nationalist parties have been gaining a foothold in the region for quite some time. In fact, the politics of these groups revolve around a sense of rejection and deprivation brought on by the inability of the Pakistani state to afford the patriotic people of Gilgit-Baltistan a status within the Federation of Pakistan, resulting in a lack of constitutional and legal protections.

This sense of deprivation has been further accentuated by the Kargil episode, in which the government of Pakistan is said to have refused to recognise the sacrifices of scores of martyred army men from Gilgit-Baltistan.

Interestingly enough, although the state of Pakistan has consistently refused to recognise the region of Gilgit-Baltistan as a part of Pakistan, it nonetheless considers its inhabitants citizens of Pakistan., as is evidenced by the application of the Citizenship Act to the region. This constitutional position, or lack thereof, arose as a result of the well-known UN resolution which demanded a free and fair plebiscite for the Kashmiri people as a part of a ceasefire arrangement. This resolution has given rise to a persisting uncertainty about the status of Gilgit-Baltistan, with it being widely believed that the Pakistani government allowed and supported the demarcation of Gilgit-Baltistan as a part of Kashmir (and therefore a disputed area) in order to use it as a bargaining chip in the settlement of the dispute.

In a situation where a referendum is in fact held, the Muslim majority population of Gilgit-Baltistan could be effectively used to swing the vote of the referendum in favour of accession to Pakistan. In light of the aforementioned objective, a formal constitutional status and the benefits accruing from the same were not given to Gilgit-Baltistan by successive governments or even by the 1973 Constitution of Pakistan.

Even the Supreme Court, in 1999 SCMR 1379, shirked away from declaring the territory of Gilgit-Baltistan a constitutional part of Pakistan. In formulating its opinion, the Supreme Court stated that it was the job of the executive and legislative branches of government to render any such decision. However, without addressing the fundamental issue of its status, the Supreme Court also ironically held that for all events and purposes, the people of Gilgit-Baltistan were citizens of Pakistan.

The said omission of the legislature and executive in making Gilgit-Baltistan a part of Pakistan, and the decision of the Supreme Court to avoid any such declaration, has created unprecedented confusion in the ranks of the citizens of Gilgit-Baltistan. The said predicament has disenfranchised the people of Gilgit-Baltistan in as much as by refusing to recognise the region of Gilgit-Baltistan as a part of Pakistan, the state and courts are essentially depriving the inhabitants of the right of representation in the parliament of Pakistan.

Although many may contend that the people of the area may not necessarily desire any such representation, it is apt to note that without such a voice within the corridors of power, the people of the area will forever be unable to influence decisions that will ultimately impact their lives. A case in point is the formulation of the Legal Framework Order, 1994, and the Gilgit-Baltistan (Empowerment and Self Governance) Order, 2009. The lack of influence and say of the residents of Gilgit-Baltistan in the political and military apparatus of Pakistan has inevitably resulted in them being governed by laws in which they have little investment or involvement.

However, that said, there does appear to be a stop gap method of temporarily resolving the constitutional limbo of the area till fresh legal and constitutional measures can be undertaken for a more permanent solution. The path to redemption has been highlighted by the Supreme Appellate Court of Gilgit-Baltistan, which in exercise of its suo motu jurisdiction and as per Article 61 of the Gilgit-Baltistan (Empowerment and Self-Governance) Order, 2009, stated in 2010 GBLR 160 that Gilgit-Baltistan was in fact a part of Pakistan. It referred to Article 1 of the Constitution of Pakistan (defining the territories of Pakistan) and declared that Gilgit-Baltistan fell within Article 1(2)(d) of the Constitution of Pakistan, 1973, which stated that Pakistan shall comprise of ‘such states and territories as are or may be included in Pakistan, whether by accession of otherwise’.

It further went on to state that as such, the Gilgit-Baltistan (Empowerment and Self-Governance) Order, 2009, had constitutional protection and status in as much as the same was enacted in pursuance of Article 258 of the Constitution of Pakistan, which stated that: “subject to the Constitution, until [the] Majlis-e-Shoora (parliament) by law otherwise provides, the president may, by order, make provisions for peace and good government of any part of Pakistan not forming part of a province.” In a nutshell, the Supreme Appellate Court, via the use of various constitutional provisions, has attempted to elevate the status of the area, and its laws, to that of a constitutional constituent of the Federation of Pakistan.

Although it remains to be seen as to whether the above mentioned interpretation of the Constitution, bringing Gilgit-Baltistan within the framework of the federation, shall be solemnised by the Supreme Court of Pakistan as well as the Government of Pakistan, the same is certainly a step in the right direction.

The people of Gilgit-Baltistan have been waiting for a period in excess of 62 years for a declaration of their status, if not outright incorporation into the Federation of Pakistan. It is important that the powers that be wake from their eternal slumber, and finally afford the people of Gilgit-Baltistan what is rightfully theirs – recognition as a constitutional and integral part of Pakistan and all the benefits and privileges of attaining the same.

The writer is a lawyer based in Karachi. Email: basil.nabi@

Gilgit-Baltistan:Community Controlled Hunting Areas

Posted on

Conservators, community workers and government officials at a meeting here on Monday called for expanding trophy hunting areas in more valleys of Gilgit-Baltistan (G-B) to bring more money to the region and improve the quality of life and ecosystem.

“The trophy hunting needs to be extended to other valleys too, if we want to see more communities prosper,” said Khalil Ahmed, an official of a project for mountain areas conservation, sponsored by the Ministry of Environment.

The meeting was attended by Secretary Environment, Abdul Hameed and Conservator of Forests, Ismail Zafar among other professionals of forests and wildlife.

Ahmed added the government should notify at least seven more valleys as “community-controlled hunting areas” as the people of those areas have contributed to the conservation of wildlife. Trophy hunting brings millions of rupees in the region every year.

“The proposal for notifying more areas for trophy hunting is pending before the government,” he said, urging the officials to expedite the process. He added that if approved, the programme will boost the economic condition of the poor people, who mainly depend on the natural resources for their sustenance. The official also briefed the meeting about the valley-level funds created for the sustainability of the initiatives taken by the government for conservation.

He added the conservation project in its earlier phase (1999-2006) was launched in 47 valleys of G-B, forming committees, which worked for the sustainable use of natural resources. “We are still working for the capacity building and strengthening of these committees,” he said.

The environment secretary said that communities should be imparted trainings so that they rely less on natural resources and more on alternative means of income generation. He called on initiating projects boosting tourism in the region.

The conservator said that dozens of communities living in resourceful valleys have been supported with written conservation plans, elaborating on an effective utilisation of the resources.

Courtesy: The Express Tribune

Gilgit-Baltistan: Mountaineering Institute to be set up in GB

Posted on Updated on

GILGIT: Inspired by Hassan Sadpara’s ascent of Mount Everest, chief minister Gilgit-Baltistan (G-B) Mehdi Shah said his government will set up an institute in Skardu to promote mountaineering as a sport in the region.

“We will set up a mountaineering institute in Skardu so we can have more people like Sadpara who make us proud,” Shah said on Sunday.

Sadpara, a mountaineer from Skardu, recently scaled Mount Everest without oxygen supply and with little monetary support and training.

“He has demonstrated the potential we have in the country,” Shah said.

The chief minister said G-B possessed immense talent, especially in the field of climbing and mountaineering, but, he added, proper patronage and support was required to polish this talent.

Sadpara shares his surname with a small village in Skardu, home to four peaks above 8,000 meters, including the second highest peak in the world K-2 (8,611 metres), Gasherbrum-I (8,068 metres), Broad Peak (8,048 metres) and Gasherbrum-II (8,035 metres), and several others rising above 7,000 metres.

Meanwhile, the tourism department in Skardu organised a rock climbing competition to mark the event, attended by school and college pupils.

“Climbing rocks and mountains is a part of our lives since we were born amid these peaks,” said Sakhi Hassan, a participant who also works in Khurpa Care that provides training to young climbers.

With some patronage and training, however, we can conquer any peak in the world, he added.

Courtesy: Express Tribune