Khyber Pakhtunkhwa Chief Minister Sohail Afridi has urged Prime Minister Shehbaz Sharif to defer the proposed withdrawal of tax exemptions for the merged districts and Malakand Division, warning that the move could negatively impact the region’s economic recovery and public confidence.
In a letter addressed to the prime minister, the chief minister stated that the proposed decision has created serious concern among local residents. He emphasized that the issue goes beyond taxation and reflects the federal government’s failure to fulfill commitments made when the former tribal districts were merged into Khyber Pakhtunkhwa.
According to CM Afridi, the provincial government continues to shoulder the financial and administrative burden of the merger without receiving the promised support from the federal government. He pointed out that Khyber Pakhtunkhwa has yet to receive its agreed financial share under the National Finance Commission (NFC) for the merged districts, placing additional pressure on the province’s resources.
The chief minister explained that the tax exemptions were originally introduced to encourage investment, create employment opportunities, and promote economic growth in the merged districts and Malakand Division. Removing these incentives at this stage, he argued, could discourage businesses and slow the region’s development.
CM Afridi also noted that although the federal government formed a committee to review the proposed tax measures, it failed to reach a final recommendation. Despite this, the decision to withdraw the exemptions was reportedly made without consulting the Khyber Pakhtunkhwa government.
He further highlighted that the KP Assembly unanimously passed a resolution opposing the proposed taxes on June 28, with support from both the treasury and opposition benches. Opposition Leader Dr Ibadullah Khan also criticized the proposal, saying the people of Malakand have already endured terrorism, natural disasters, and economic hardship. He warned that imposing new taxes would amount to economic injustice and undermine the region’s long standing constitutional tax exemptions.
The provincial government has requested the federal government to review the proposal and delay any decision until all stakeholders are properly consulted.
