Furore over closure of tax haven

The aftermath of the federal government’s decision to extend the Customs Act of 1969 to Pata has been a heated one. The federal government has claimed that it took the decision at the request of Khyber-Pakhtunkhwa’s (K-P) chief minister. However, the provincial government later clarified that the decision was taken by an apex committee and that it would become the responsibility of the province to enforce it, and that the CM has suggested to the federal government to grant an amnesty on custom duties on the import of cars. Meanwhile, businesses in the area have voiced their opposition to the proposed extension of the Customs Act to Pata and shutter-down strikes have been observed in Dir, Swat, Shangla, Buner, Chitral and Batkhela.

We believe that the K-P government, having realised that constitutionally it was not empowered to block the federal decision, has opted to play to the gallery to avert paying the political price for the decision. But all this could have been easily avoided had the federal government tried to mobilise public opinion before making the decision. Clearly, these protests are being inspired by a handful of businessmen who fear that the imposition of the Customs Act would rob them of the windfall profits accruing from the smuggled vehicle business. Crime and militancy have been fostered not only by the use of non-custom paid and non-registered vehicles in the area but also by the extra resources generated by this clandestine business. While there is a constant demand to bring the tribal areas into the mainstream of national life, vested interests have often opposed such moves just to preserve the benefit they get from the tax-free status of these areas. It goes without saying that all parts of the country should be governed by a single set of laws. At the same time, the state should also be fulfilling its responsibilities to provide citizens with a decent living standard, something that has not always happened in the tribal areas.

Published in The Express Tribune, April 18^th,  2016.

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