Federal tax levy: Lawmakers from G-B vague over tax issue

Chief minister and governor do not endorse imposition of income tax in region.

GILGIT:

The top brass of Gilgit-Baltistan’s (G-B) government remains vague over whether the federal government’s decision to impose an income tax has been fully endorsed in the region.

“The decision to impose income tax in the region has not yet been taken,” Chief Minister Mehdi Shah told The Express Tribune on Sunday when asked if his government was endorsing the decision to impose income tax in G-B, a region whose constitutional status is still ambiguous.

He said that tax would not be levied without first signing a written agreement between the regional government and the federal government over certain points.

Shah’s remarks stood in clear contradiction with officials who had confirmed the decision to impose an income tax.

A member of the G-B Council, Amjad Hussain recently confirmed that the decision to impose income tax has been taken and a notification was also issued to this effect.

He, however, said the decision should have been preceded by a written agreement to avoid legal complications that might surface due to G-B’s constitutionally disputed status.

When the same question was posed before Governor Pir Karam Ali Shah, he neither denied nor accepted that a decision to this effect had been taken.

He, however, said that “every respectable nation pays taxes to live with honour and dignity so it shouldn’t be an issue if we have to pay taxes.”

The governor said that if an income tax was imposed, then the regional government would have sufficient money at its disposal to invest in development projects.

According to sources, people earning more than Rs400,000 per year would be liable to pay an income tax amounting to 10 per cent. Similarly, those earning between Rs750,000 to Rs1.499 million per year will be liable to pay a 15 per cent of tax on their earnings.

Constitutional experts believe that people in G-B cannot be taxed unless the constitutional status of the region is settled.

Published in The Express Tribune, November 5^th, 2012.