PESHAWAR, May 25: The NWFP government is facing difficulties in recovering the urban immovable property (UIP) tax from tribal traders and shopkeepers of Bara markets that are located in the ‘settled’ parts of the provincial capital.
A senior official of the excise and taxation department told Dawn that traders and businessmen of Bara markets — commonly known as Karkhano markets — had not been paying the UIP tax and the arrears under the head had reached Rs50 million.
The department, said the official, had made every effort to recover the amount by serving notices on the traders under the UIP Tax Act 1958, time and again but to no avail.
The Karkhano markets, situated on the boundary of the Khyber Agency and the provincial capital, are famous for trading in smuggled goods. A variety of foreign-made goods are available in the markets, which are smuggled via the land route of Afghanistan. The markets have 8,000 to 8,500 shops and display centres of various sizes.
Such markets are situated in the ‘settled’ parts of the provincial capital, but the business there is dominated by people of tribal origin, who do not pay any tax to the government.
The traders contend that since the government has exempted the tribal areas from all kinds of taxes to mitigate the extreme poverty there, the collection of UIP tax is unjustified.
According to the official, the excise and taxation department has taken up the matter with the civil secretariat, Fata, to resolve the issue. In a communication sent to the additional chief secretary, Fata, on May 22 the department had sought support for the recovery of arrears, he said.
“The additional chief secretary, Fata, has been informed that the department is trying its best to convince the tribal people running businesses in such markets to pay the UIP tax, but they are reluctant to do so.”
The letter, according to the official, stated that the political administration of the Khyber Agency could help the department in this regard. Therefore, the political administration might be directed to extend all possible assistance to the department in recovering the tax.
A meeting of senior officials of the excise and taxation department, Fata’s civil secretariat and the Khyber Agency political administration for resolving the issue was held in January, but no progress was made, the official maintained.
An official of the civil secretariat, referring to the decisions taken at the meeting, said the excise and taxation department had clearly been told that since the area where such shopping centres were located fell in a ‘settled’ district, collection of taxes was the provincial government’s responsibility.
However, he said, even then the department had been assured of support from the political agent of the Khyber Agency.
