Tax enforcement reaches tax-free Malakand
The FBR collected Rs6.6 trillion in income tax, missing the goal by Rs323 billion. Receipts were 13.5% higher than last year, inclusive of super tax. photo:file
Tax collection has been quietly enforced across Malakand Division starting July 1, triggering widespread and intense protests in Shangla and other districts.
Traders, builders, contractors, government employees, transporters and members of the general public have strongly condemned the new measures, terming them contrary to the region's historical and constitutional status. Reports of deductions from bank cheques, and alleged cuts from payments made to deserving women under the Benazir Income Support Programme (BISP), have further fueled public anger.
According to locals, from July 1, banks began deducting up to eight per cent tax on cheques when amounts exceeding Rs50,000 were withdrawn or received by non-filers. On July 2 and 3, heated arguments erupted between customers and bank staff as government employees, traders and businessmen faced unexpected deductions while trying to cash or deposit cheques.
Branch managers of various banks confirmed that they were acting on instructions from the Federal Board of Revenue (FBR) to enforce tax collection across Malakand Division.
The affected groups have expressed grave concern and urged the federal government, particularly the MNAs and MPAs elected from Malakand Division, to immediately raise the issue on relevant forums and take concrete steps to relieve the people of the new tax burden.
Protestors pointed out that under the agreement signed at the time of the merger of the former State of Swat with Pakistan, the entire Malakand Division was declared a tax-free zone. They described the current enforcement as a violation of that agreement and discriminatory against the people of the region.
The people of Malakand Division, particularly Swat, Shangla, Dir, Buner and other districts, have already suffered for decades from natural disasters, terrorism, economic hardship, weak commercial activity and other serious challenges. Imposing fresh taxes at this juncture, they argued, amounts to piling further financial burden on an already struggling population.
Separately, from July 2, complaints surfaced of alleged large-scale tax deductions from instalments being disbursed to eligible women under the Benazir Income Support Programme. Some beneficiaries claimed that up to eight per cent was being deducted on larger amounts, while others reported automatic deductions appearing in the system immediately after biometric thumb verification.