KP warns Islamabad as Pakistan-Afghanistan border trade stays shut

Finance adviser Muzzammil Aslam says closures hurting jobs, revenue, with 80% decline in border trade levies

KHYBER PAKHTUNKHWA:

The Khyber Pakhtunkhwa government has warned the federal government that the prolonged closure of trade at the Pakistan-Afghanistan border is causing revenue losses and job cuts.

In a letter to Federal Commerce Minister Jam Kamal, KP’s Adviser on Finance Muzzammil Aslam said cross-border commerce had been severely disrupted, with trading activity “effectively coming to a halt.” He noted the situation was especially concerning as Pakistan faces declining exports, slower economic growth, and rising unemployment.

Aslam said the province had been informed of an “alarming” 80% decline in collections of the Infrastructure Development Cess, a levy tied to border trade. He attached a letter from the Khyber Pakhtunkhwa Revenue Authority (KPRA) on tax receipts, highlighting broader revenue challenges.

The finance adviser called for a high-level meeting of federal and provincial stakeholders to assess revenue implications for Khyber Pakhtunkhwa and address challenges faced by exporters and traders.

Border closure

The main border crossings with Afghanistan have remained closed to regular trade and transit since October 10, 2025, following deadly clashes along the frontier and reports of Pakistani airstrikes. Islamabad has linked the escalation to demands that Kabul act against militants it says launch attacks from Afghan soil, which the Taliban has denied.

Read: Pakistan seals border with Afghanistan after cross-border fire

A ceasefire was discussed in talks hosted by Qatar and Turkey and was reported to be holding, but trade has not resumed, with negotiations stalled as both sides continue to blame each other.

In early December, Pakistani officials said Islamabad approved a limited humanitarian exception to allow UN relief containers into Afghanistan while maintaining the wider border closure for regular trade.

Fresh efforts have been made to resolve the deadlock through trade-focused engagement. Pakistan and Afghanistan agreed to form a 13-member joint committee to hold formal negotiations at Torkham to ease border-management issues and restore cross-border trade.