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GB to tax CPEC containers passing through its territory

21 May 2017 No Comment

By Ghulam Abbas in Pakistan Today, May 20, 2017
While things are not clear about the possible taxes, duties (Import tax/ duty, Toll tax, Port clearance charges etc) to be charged by Pakistan on export/import by China under the China-Pakistan Economic Corridor (CPEC), the government of Gilgit-Baltistan (GB) is going to charge an ‘environmental tax’ on every container passing through its territory.

Talking to Pakistan Today, Chief Minister GB Hafeezur Rehman said that Gilgit-Baltistan Legislative Assembly (GBLA) will be passing a resolution regarding the tax and subsequent legislation would be made to charge a fixed tax on every container that enters into GB, both from China and western part of Pakistan.

“We got the permission from the federal government and under the Self-Governance Order 2009 the region is empowered to levy environmental tax on vehicles entering GB,” he said, adding that the income from this tax would be spent on environmental protection and road infrastructure of the area.

Environmentalists have already cautioned that the mountainous region will suffer due to an increase in vehicular traffic after the completion of the multibillion-dollar project. The omission of gases and noise pollution will also add to the destruction of the environment.

In reply to a query regarding exemption of taxes on imports/exports of China through the corridor in Pakistan, he said though the centre would be deciding about customs duties and other taxes on this route, GB is at least empowered to levy environmental tax as per rule. Details of how to impose this tax will be sorted out with the help of legal and environmental experts.

It may recall here that Chinese investors in the CPEC are enjoying all sorts of tax breaks from customs, income, sales, federal excise and withholding taxes. However, the government is of the view that despite all the tax discounts and exemptions, which amount to billions of rupees in lost revenue, there will be no adverse impact on local industries and domestic investors.

Earlier in a written reply submitted to the National Assembly, the finance ministry had explained the series of tax exemptions or discounts offered to Chinese investors, notified through statutory regulatory orders (SRO).

Talking about Special Economic Zone in GB as designed under CPEC, Hafeezur Rehman said that the regional government has received a questionnaire regarding the availability of electricity, raw material, space and many others required for establishing the zone. “Presently we lack enough electricity to meet the demand of industrial zone; however, we have planned to set up a power plant of 10 megawatts near the specified location of the zone,’ he said.

He avoided responding to the question regarding the reason behind the postponement of his visit to China along with Prime Minister Nawaz Sharif to attend the ‘One Belt One Road’ international seminar last week.https://profit.pakistantoday.com.pk/2017/05/20/gb-to-tax-cpec-containers-passing-through-its-territory/

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