Pakistan
Can taxes be taken in Gilgit – Baltistan?
The chief minister of Gilgit – Baltistan, Mehdi Shah, has told a gathering the other day in Gilgit that the GB government will have to think about imposing taxes in the region to increase its revenues. We would like to know you ideas about taxation in Gilgit – Baltistan.
The issue of taxation has various dimensions, including political, economic and structural.
Please vote on on the poll below and let us also discuss this issue.
[polldaddy poll=2699878]
how can there be taxation without representation in the senate and the national assembly?
This is in reference to the topic,” can taxes be taken in Gilgit-Baltistan”?. You have very rightly pointed out that taxation has many dimensions and aspect. There are two kinds of taxes: (1) Direct taxes like Income tax, wealth tax and corporate profit tax.
(2) Indirect taxes such as taxes imposed on commodities, which are passed on to the consumers through increase in prices.
As far as the question of direct tax is concerned, it cannot be imposed without representation in the national parliament. No taxation without representation. G-B is not part of Pakistan in terms of the 1973 Cnstitution whose Clause No. 1 Does not cover G-B. Further more,G-B is the most backward and it has no ability to pay taxes,which is one of the canon of taxation.
To avoid this unjustified tax, strong political resistence would be required.
Indirect taxes can be collected from any one who purchases a good or service,whether citizen or foreigner. The people of Gilgit-Baltistan are already paying indirect taxes, which are collected by the Federal government and constitute part of common pool which are then distributed amongst the provinces by the National Financial Award Committee based on agreed formula. Instead of imposing illegal and unconstitutiona direct taxes, the share of NFC award using the formula of poverty, backwardness and population should be given to the G-B. AS a matter of fact G-B’s expenditures should be borne by the centre till such time that the area is made full fledged province with full control over its natural resourcs.
Well I think if the administration make sure that that paid taxes will be spend only and only for the development of Gilgit Baltistan then the imposing of the taxes is legitimate. Otherwise it is a wrong decision.
Till the tax proper utilization system is not in place it will be the wrong decision.
The Government is not authorized to collect tax without giving due right to the local people.
The so-called CM should be told that how he is thinking of doing this. The federal govt has just changed the name of your designation.. not given you the power…. so don’t be fool to talk more about it. The people of GB have voted you to get releif not to get more burdened.
How much of the custom duty collected at Sost is expended on the development of GB.
I hope people will resist any such action and condemn CM’s statement.
Yeh Mehdi Shah apne Boss Zardari Kay liye Paisey jama Karna Chahta hoga..Warna Isko River Indus Ki royalty mangani hogi
The issue of tax is not that easy to decide whether to impose tax in GB or not. The indirect tax is already been paid by each individual included in the price of the commodities they use. To decide about the direct taxes i.e. wealth tax and income tax first we need to take in to account utilization of the revenue already generated in the GB from different sources including:
• Revenue from the licenses issued to the mining companies operating all over GB
• Revenue received from the Sost Dry port
• Revenue received from the expedition groups and tourists visiting the GB
These are few of the sources of revenue in the GB but GB Govt. even don’t know where these revenues go. The revenue from the Sost Dry port goes directly to the Central Board of Revenue CBR, the revenue generated from the tourist goes to the ministry of Tourism and the revenue generated from the minerals and mines goes to the respective ministry. The people of the area are not even aware of the usage and of these revenues. The GB govt. should first struggle to get the possession of its own revenue already generated in the area than it can move further towards such sensitive issues.
Despite the fact that GB generates enough revenue for the GOP in its capacity, the GB is no a member in NFC award yet so it is ridoulcus to talk about taxation in GB. It is also request to CM GB to avoid such type of statements which are harmful for the neglected and remote area. Its need of the day to consult and hire specialists/economists to assist and advise the GB government for making recommendation about taxation in GB. I think a person like Dr.Sabit is the best option for such slot.
Its time to take concrete and seriously steps towards the important issues like royalties of dams which are underway in these areas and the illegal licenses issued to private firms for mining in the area. Unfortunately our current elected leadership is silent about these important issues which are of serious concern.
We expect the new govt. to think out of the box and avoid the traditional approaches to bring constructive changes in the region to address the new challenges and explore the opportunities
Yes, taxes can taken in Gilgit-Baltistan and actually people are already paying taxes. What is needed is to broaden the tax net. As Dr. Sabit Rahim Sahib has already illustrated the types of taxes as being direct and indirect. In case of Gilgit-Baltistan, people ranging from privileged to marginalised, all are paying indirect taxes while purchasing commodities. When it comes to direct taxes, the system is not place so far. When there is talk about imposing taxes, normally it is thought that the people can not afford paying taxes and secondly the issue is associated with being deprived of rights. Actual situation is that poor as well as the privileged are bearing the same burden through indirect taxes, which is unjustified and this necessitates imposition of direct tax. Direct tax is always imposed on a certain level of income and people having the given level of income have to pay those taxes. Through this process big businesses, big landowners, public and private executives, politicians, corporations and enterprises will come under the tax net, which will generate a substantial amount for the (provincial?) set up, which presently is entirely dependent on the grants from government of Pakistan. Poor being out of the income level will not have to pay the direct taxes, and resultantly they will not be worse off by imposition of direct taxes. I think we can avoid paying taxes for long time. If our local government is able to have some source of income, it can initiate developmental activities on its own and can create employment opportunities, which will benefit the people.
I think we can NOT avoid paying taxes for long time. If our local government is able to have some source of income, it can initiate developmental activities on its own and can create employment opportunities, which will benefit the people.
LET GOVT OF PAKISTAN ACCEPT US AS A FULL CITZEN,OF PAKISTAN…………….. GIVING US THE FULL RIGHTS OF PAKISTAN
STARTING FROM ITS CIVIC RIGHTS AND RIGHTS OF VOTE
AND REPRESENTATIONS IN PAKISTAN PARLIAMENT AND GIVE US RIGHTS OF POWER AS A MEMBER OF PARLIAMENTARIAN AND NATIONAL ASSEMBLY
BUT NOT A DUMMY BOGAS……………..GILGIT=BALTISTAN WITHOUT ANY PROVINCE.
WE SEE GB AS A HELPLESS PLACE ,WITHOUT GOVT OF PAKISTAN VISION FOR THE FUTRE PROGRESS AND LONG TERM DEVELOPMENT IN DIFFRENT SECTORS,
THE WORLD KNOWS WE ARE HARD WORKING AND PEACE LOVING PEOPLE
WE CAN ONLY THINK OF TAX COLLECTION ONCE OUR BASIC NEEDS ARE MET,BY OUR LOVELY HOME LAND THE PAKISTAN SINCE ITS INDEPENDE TODATE
THAN WE CAN ONLY THINK OF IT.
GOD BLESS GILGIT -BALTISTAN…
PAKISTAN PAYINDA BAD.LONG LIVE PAKISTAN.
I agree with Dr Sabit Rahim’s statement which he wrote about the imposition of tax in GB one can not impose tax with out giving any proper representation in the National Assembly and senate.
With reference to commnts at point No.8 by SBA,it may be clarified that even direct tax was being collected from the pay of officers whose annual income was above exemption limit. Similar was the case with contractors in the 90s when I was working as Assistant Chief in the P&D. I was paying taxes. The question is that it is politically and constitutionally not right. The money so collected goes to the Federal treasury and constitute part of common pool. Without political representation in the Pakistani Assembly, the people of G-B have no control over this money.
SBA is right. Indirect taxes are regressive as they fall mostly on poor people. First of all,we should determine how much indirect taxes including custom duties, direct taxes and non-tax revenue is collected from G-B by the Federation. A study should be conducted to determine how much resources G-B transfers through varius channels to the centre and how much we are getting in terms of budget allocation. This will also include royalties of minerals, mountaineering and river Indus. All these factors need to be looked into before deciding on taxes as people of G-B are already paying these taxes.
The annual revenue of tourism in GB is .2 of GDP of Pakistan. If only one department earn .2 of GDP, which is on recession in these recent years, How many is the Govt earning from the other dept of GB. Provide us facilities like. gas, proper electricity, and proper infrastructure, and presentation in lower and upper house then expect tax from the area.
Thank you Dr. Sabit Rahim Sahib, for your clarification.
In my opinion ‘tax’ is a noble contribution and a duty of a citizen to the state but the biggest challenge is; how transparently is collected and utilized.
Here I copy an article from Wikipedia.
Taxation has four main purposes or effects: Revenue, Redistribution, Repricing, and Representation.
The main purpose is revenue: taxes raise money to spend on roads, schools and hospitals, and on more indirect government functions like market regulation or legal systems. This is the most widely known function.
A second is redistribution. Normally, this means transferring wealth from the richer sections of society to poorer sections.
A third purpose of taxation is repricing. Taxes are levied to address externalities: tobacco is taxed, for example, to discourage smoking, and many people advocate policies such as implementing a carbon ta
A fourth, consequential effect of taxation in its historical setting has been representation. The American revolutionary slogan “NO TAXATION WITHOUT REPRESENTATION” implied this: rulers tax citizens, and citizens demand accountability from their rulers as the other part of this bargain. Several studies[citation needed] have shown that direct taxation (such as income taxes) generates the greatest degree of accountability and better governance, while indirect taxation tends to have smaller effects.
Thaqnk you SBA for the response. While I am on the subject, let me further explain that the provincial governments also impose provincial taxes as per their rules and spend this money within the province for the common benefit of all. However, such taxes are imposed only after due debate in the Provincial Assembly about the prones and cones of the tax and its approval by members. Funds collected from such taxes are under the control of Provincial government.
if the collected taxes will be spent in the GB. Then there will be no harm. However, Federal Government can not impose taxes in the region as we have no constitutional representation in the Federal Government.
being a new member I offer my greetings to all.
incidentally, today searching for some material on taxes in GB, I came across with this valuable discussion. You may welcome me in your forum, or maybe otherwise, I am the responsible for taxation management in Gilgit Baltistan, Director Excise and Taxation GB.
i read the opinions of respected members, believe me, being the son of soil, i agree with those who demand 1st class citizenship in lieu of leviable federal taxes…….Dr. Sabit Rahim may second me as he had been in the government machinery, we as a nation only contribute about 2.8% of the annual expenditure of the GB. rest comes from Federal Gov. for your surprise we, with the present collection cannt even meet the expenditure being incurred on wheat subsidy alone, let other things alone. some of the friends talked about Sost dry port, Indus royalty, minerals explorations and tourism sector revenues. let me tell you as a universal law all borders are federal property thats why customs ruls are leviable at sost and rest of GB is exempted, you can impose an additional tax on goods being imported from china but cannot claim entire revenue being collected at Sost. secondly, running water costs no money, if that had been the case Pakistan had had to pay India for all five rivers flowing into the country. thus no royalty can be claimed on Indus, moreover, it originates from India not GB. thirdly, minerals can make a huge contribution towards our revenues but presently we have nothing considerable to tax…..notwithstanding, the provincial government will have to generate some funds to invest in this sector. and finally what to say on tourism…..can some tell me how many foreign tourists are visiting GB in these years….can the money they are depositing n federal government as fee make any significant change in the above 2%.
so, my soil fellows, one thing we must be clear in NO TAXATION WITHOUT REPRESENTATION’ my representative was not sitting in the national assembly when they were approving imposition of taxes, then why should I pay those taxes. hence no federal taxes whether direct or indirect have any legal base in GB. but we will have to pay provincial taxes as and when levied by the provincial government for the purposes defined by one of our friends Yar Khan. SHAYAD ISI KI WAJAH SAY HAMARI IJTAMAI BEHISI WALI AADAT KHATM HO JAYE.