No more discount: G-B contractors call strike over withdrawal of tax rebate

Will suspend work on 400 development projects starting today

GILGIT: Contractors in Gilgit-Baltistan have announced a strike after the federal government withdrew rebate on income and other tax in the region. The increase in tax, which is now 7.5%, will be applicable to food items, transport companies and print and electronic media.



“This is illegal and, in protest, we have decided to stop work on development projects,” said G-B Contractors Association President Firdos Ahmed at a news conference in Gilgit on Sunday. “Levy taxes if you have to, but after giving the region its due constitutional status.” A day prior to this announcement, the federal government withdrew the significant tax discount enjoyed by residents of G-B, increasing tax from 3% to 7.5%.

“The contractors, who have already been denied escalation charges over the years, have received a blow with this move,” said Ahmed, who was surrounded by dozens of contractors at the press club. “This decision [of the federal government] will hurt them the most as it will directly hit contractors; we will start a movement against the decision.”

Other speakers present at the conference said the government should first clear “our outstanding dues before imposing new taxes.”

The boycott will halt work on over 400 development projects initiated by the government across the region. The contractors also threatened to hold demonstrations in front of CM House and the assembly building from Monday (today) onwards till the issue is settled.

The issue

In a letter, the G-B Council asked Accountant General Pakistan Revenues to withdraw the discount given to the residents of G-B since decades. The letter said the facility was a mistake which did not have a legal standing, therefore it should be remedied.



The discount, which the residents of G-B had been enjoying till now, was apparently given because of the disputed status of the region. However, it will now be withdrawn in the backdrop of possible reforms the federal government is planning to introduce in the Empowerment and Self-Governance Order 2009. A committee formed to introduce reforms has met twice recently, suggesting ways forward. G-B Chief Minister Hafeezur Rahman is also part of the committee which is headed by Adviser to Prime Minister on National Security Sartaj Aziz.

Published in The Express Tribune, December 21^st,  2015.