Gilgit-Baltistan: GB to be Declared a Tax Free Zone in order to attract FI

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Gilgit (ET): After deferring the decision of imposing taxes in Gilgit-Baltistan due to its controversial status, the federal government has planned to declare the autonomous region as a tax-free zone with an objective to attract foreign investment.

“The decision has been taken in view of G-B’s disputed constitutional status which had also forced suspension of tax imposition in the region,” sources told The Express Tribune on Wednesday.

In a high-level meeting chaired by Prime Minister Yousaf Raza Gilani held in Islamabad during October, the decision of imposing tax was deferred after the G-B government sought its share in the NFC award in return for levying taxes. However, legal experts briefed the government that G-B could not claim its share in the NFC award unless it was declared the fifth province of the country through an amendment in the constitution of Pakistan. Gilgit-Baltistan government had earlier principally decided to bring the employees earning more than Rs50,000 per month into the tax net to increase the income of the government. The decision, however, met stiff resistance as politicians demanded G-B’s representation in the parliament, a decision pending since 1947. According to G-B Public Accounts Committee Chairman, Muhammad Ibrahim, G-B government could generate nearly Rs10 billion from taxes on the corporate sector, registered firms, corporations and salaried class.

Authorities believe that after declaration of the new status to G-B, a large number of companies including Chinese companies would readily invest in power, mineral, tourism and environment sectors in G-B, a mountainous region believed to have immense potential in all these sectors.

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