The tax of 0.08 per cent on the value of every item transported to Afghanistan will earn at least Rs.5 billion annually. – (File Photo)

KARACHI: Pakistan introduced a tax Tuesday on all goods transiting into Afghanistan, except supplies for US-led Nato troops fighting the Taliban, a provincial government minister said.

The decision in southern Sindh province, where Karachi is Pakistan's largest sea port and used by Nato troops to ship equipment to landlocked Afghanistan, follows a transit trade deal between Kabul and Islamabad.

“We have levied the tax under the Afghan Transit and Trade agreement signed by the two countries last year on all the goods going to Afghanistan by air and road,” provincial excise and taxation minister Mukesh Kumar Chawla told AFP.

“We have imposed a tax of 0.08 per cent on the value of every item transported to Afghanistan... It will earn at least five billion rupees ($58.62 million) annually,” he said.

Nato goods have been shipped to Karachi and driven through Pakistan for more than nine years since the 2001 US-led invasion of Afghanistan.

But Pervez Musharraf, Pakistan's ruler from 1999 to 2008, exempted Nato goods from taxation, despite heavy criticism from opposition parties.

“We are not applying the tax to Nato supplies because it is part of our longstanding policy,” Chawla said.

Pakistan was devastated by floods last year, which affected 21 million people and according to the World Bank caused $9.7 billion of damage.

The cash-strapped government is under increasing international pressure to introduce tax reforms to raise revenue, avert economic meltdown and meet IMF targets in line with a bail-out package negotiated in 2008.

A standing committee in Pakistan's upper house of parliament last month called for taxes to be imposed on Nato goods trucked through the country.

Nato oil tankers are regularly attacked in Pakistan by Taliban militants fervently opposed to the United States.

Pakistan remains the main overland supply route for troops in Afghanistan, although the United States increasingly looks to open alternative routes in central Asia.

Transporters say more than 200 tankers and trucks leave Karachi daily for Afghanistan through the Pakistani border towns of Chaman and Torkham.

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