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Pakistan To Tax Afghanistan-Bound Convoys

by Mary Swire, Tax-News.com, Hong Kong

09 February 2011


The government of Pakistan's southern province of Sindh is levying a new sales tax of 0.8% on the transport of fuel and goods to Afghanistan, officials have said.

"We have implemented the tax under the Afghan Transit and Trade agreement 2010," Mukesh Kumar Chawla, Sindh province minister for excise and taxation, announced. "The tax is levied on all items that are transported. At the present rate we stand to earn at least five billion rupees (USD58.82m) annually from this regime."

The levy will not include supplies for US-led NATO troops fighting the Taliban, more than 80% of which is routed through Pakistan.

The Pakistani senate had only recently demanded that a tax be levied on NATO convoys because of "the problems they caused to local citizens". They start from the port city of Karachi in the south and are routinely attacked along the route by militants sympathetic to the Taliban's cause.

The cash-strapped Pakistan government is under increasing international pressure to introduce tax reforms to raise revenue and to satisfy the requirements of its IMF bailout package.

TAGS: Pakistan | tax | sales tax | Afghanistan

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