No more ‘tax holiday’: Pakistan mulls ending tax breaks for NATO trucks

Pakistani land, facilities were used by NATO on ‘verbal understanding’.

Pakistan is considering charging “millions of dollars” in taxes on Nato trucks and tankers which pass through Pakistan on their way to Afghanistan under what was previously a ‘verbal understanding’.

There had been no official agreement with the US or Nato regarding the use of Pakistani land and facilities, an official of the defence ministry told the BBC.

The senior officer said that there was neither any tax nor a fee for the use of Pakistani ports and storage facilities.

Pakistan’s fragile alliance with the US crashed to new lows after November 26, when Nato air strikes killed 24 Pakistani soldiers in what Islamabad said was a deliberate attack.

Islamabad sealed its Afghan border to Nato convoys, closures that entered a 17th day on Monday, forcing trucks back to Karachi.

The move was part of a list of recommendations passed by a parliamentary committee following the attacks.

Another official of the defence ministry, who chose to stay anonymous, said that the parliamentary committee also recommended that a tax be imposed on oil supplies to Nato as is imposed on every litre sold to Pakistanis.

“Pakistan will now impose tax on Nato supplies in light of the international conventions and practices, which will give the national exchequer billions of rupees of income,” he added.

Replying to a question, he said that the issue of any tax on the US or Nato supplies never came up during the last decade. He said that it was practically a kind of a ‘tax holiday’ for Nato and the USA.

He further said that recently when containers carrying supplies for Nato were attacked, the Frontier Corps was called to protect them without any payment.

Meanwhile, Foreign Office spokesperson Abdul Basit also confirmed that he was not aware of any agreement between Pakistan and Nato or the US regarding the use of Pakistani land, ports and other facilities for the supply of goods through Turkham or Chaman.

Communications Minister Arbab Alamgir recently said that the use of roads by Nato containers put an extra burden on Pakistani roads and, thus, have inflicted the national exchequer a loss of $1b, according to a survey completed two years ago.

He said that Pakistani roads suffer a damage of Rs20 to 25 billion every year as daily about 350 to 400 containers pass through Chaman or Turkahm border to Afghanistan.

He said that the issue was raised with the US through ministry of foreign affairs but it remained unanswered.

Published in The Express Tribune, December 13^th, 2011.