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

Published: December 13, 2011
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Pakistani land, facilities were used by NATO on ‘verbal understanding’. PHOTO: AFP/ FILE

Pakistani land, facilities were used by NATO on ‘verbal understanding’. PHOTO: AFP/ FILE

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 13th, 2011.

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Reader Comments (29)

  • Usman
    Dec 13, 2011 - 9:56AM

    Unbelievable. They’ve enjoyed a tax holiday for more than a decade and then have the nerve to talk about how much aid they’re giving? This is insane. And what does raising the matter with the US consulate going to acheive? They need to be back taxed for the last 10 years.

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  • CK
    Dec 13, 2011 - 9:58AM

    It should not have been given to them in the first placeRecommend

  • numbersnumbers
    Dec 13, 2011 - 9:59AM

    Time to raise the price of F-16 spares and other weapons systems by about 10,000 percent!

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  • Mona
    Dec 13, 2011 - 10:24AM

    I can’t believe that! And they’ve been humiliating us over aid! Who gave Musharraf the right to sell Pakistan just like that? We should recover the lost amount from his pockets! Recommend

  • NA
    Dec 13, 2011 - 11:09AM

    @numbersnumbers:
    F-16 spares are already coming from other sources not from US.

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  • noman
    Dec 13, 2011 - 11:11AM

    we wll crash f-16 on ur army base as a sucide attack with nuclear weapons…. currently ur begging for passageway..

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  • noman
    Dec 13, 2011 - 11:13AM

    HOw much will this tax be probably $500 and above per truck or what

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  • guest
    Dec 13, 2011 - 11:20AM

    RETROACTIVELY is the word…

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  • Shyam
    Dec 13, 2011 - 11:23AM

    Time to say goodbye to any chance for duy free access for textiles to EU/NATO countries

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  • IAS
    Dec 13, 2011 - 1:05PM

    Means if I got clear a fuel truck on account of NATO (without taxed) and can sell within Pakistan which will benefit me alot… think about it..

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  • Malatesh
    Dec 13, 2011 - 1:29PM

    Pakistan is imposing tax on supply trucks Now which are having no business left after NATO left them. How these poor people will surview?

    Dont tell me that Pakistan is asking NATO to pay tax for supply route the had used from past decade which was tax free till now. Nobody will listen to this.

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  • anon
    Dec 13, 2011 - 1:31PM

    Well if it cost the NATO 6000$ through Pk. It cost them 14000 $ throught northern supply route.

    If they charge around 2000$ per container time 500 container per day . it comes to one million $ . That means we get 365 million $ * 90 $/rs = 32 arab rupees to the economy without any aid. wonder where are our economist

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  • anon
    Dec 13, 2011 - 1:35PM

    For Nato it cost 6000$ per container through pk and cost 14000$ through northern route. If PK charge 2000$ per container time 500 contain per day that is one million dollar per day.

    In one year that would amount to 365 million dollar or say * 90 rupees per dollar that is 32 arab rupees. I wonder where are our economist and tax official.

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  • Shayan
    Dec 13, 2011 - 3:32PM

    All those Musharraf lovers out there. It was thanks to him.

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  • Shyam
    Dec 13, 2011 - 3:33PM

    @noman
    we wll crash f-16 on ur army base as a sucide attack with nuclear weapons…. currently ur begging for passageway..

    Amusing that you intend to bomb afghanistan with nuclear weapons. I bet the pakhtuns will be thrilled that you killed thousand of their brethren. Plus if the nuclear fallout doesn’t kill most people in Pakistan, the US nuclear retaliation with megaton thermonuclear bombs definitely will

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  • Shayan
    Dec 13, 2011 - 3:53PM

    This is preposterous. The custom duties on toyota corolla with a 1300 CC engine is Rs. 700,000 and a bullet proof armored 4000 CC humvee goes for free.

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  • Cautious
    Dec 13, 2011 - 5:01PM

    You stole 8,000 NATO containers in Kabul alone — if NATO pays a tax are you going to stop stealing their supplies?

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  • Chengez K
    Dec 13, 2011 - 5:13PM

    Let them pay taxes for last years & then we will talk regarding the next steps…….

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  • Muslim
    Dec 13, 2011 - 6:15PM

    Mushii sold out the country!!

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  • stuka
    Dec 13, 2011 - 7:07PM

    Do Pakistanis realize that the US also has the capability of applying a blockade on Pakistan itself? As a land locked country Pakistan has the legal obligation to provide one port and two land based transit points to Afghanistan. Not doing so is almost equivlant to an act of war.

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  • Hafeez Pasha
    Dec 13, 2011 - 7:34PM

    This was Musharraf’s doing but there is no excuse for the “democratic government” to continue an unjust policy. We should tax them retrospectively.

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  • Tariq
    Dec 13, 2011 - 8:17PM

    I thought Pakistan closed these routes. If the routes are closed, how will taxes be charged?

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  • Faraz
    Dec 13, 2011 - 9:40PM

    @ Stuka
    Why don’t the Americans ask the Iranians or the Chinese to give their ports?
    Stop lecturing about “legal obligations” & try maybe think if you can speak about the civilians killed by drones, where are the legal obligations?????Recommend

  • Shayan
    Dec 13, 2011 - 11:49PM

    @Stuka
    One more war and americas economy will be like ours.

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  • sohaib
    Dec 14, 2011 - 1:06AM

    What country is this? How could thay allow the goods to pass for a decade without any tax and just on verbal understanding? Our generals and politicians sell this country very cheap. And they are considering taxes when the war is almost over!!! I cant believe our inept decision makers.

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  • Grace
    Dec 14, 2011 - 2:12AM

    @Usman: Imagine how much tax has been lost to the Pakistani government by this so called free transport facility. Fair is fair. Pakistan has lost 100s of billions of dollars due to our efforts to oust the Soviets, successfully ending the Cold War by bringing down communist Soviet Union, the problems due to foreign fighters brought in byt eh West etc. Cancel all US aid and just make sure the nation is paid appropriately for services it renders. Pakistan needs to look after its own interests only.

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  • David
    Dec 14, 2011 - 3:22AM

    This joke with the nation of Pakistan should stop now!!! We need all these Nato adventures to go with Nato from where they came..we have no space for them. We had enough of this illegal and immoral killing of our innocents….no more concessions for any invaders. It is time to reclaim. Pakistan has lost $60-$70 billion and a loss of 35-40,000 people and 6-7000 soldiers. We need Nato to clear its bills, forward apology, punish those who were involved in killings of innocents through drones and helicopter attacks, punish agents like Davis, and clear all loans of Pakistan…once it all is done, we will discuss future relationships!

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  • Khan
    Dec 14, 2011 - 3:26AM

    So we are taking aids instead of charging them fair tax or for the use of our facilities? Where these guys running a country or a cheese burger factory?

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  • Shyam
    Dec 14, 2011 - 12:17PM

    @Shayan
    One more war and americas economy will be like ours.

    Not if the war is with you

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