Traders in Gilgit-Baltistan Protest Against Tax Collection at Sost Dry Port

Traders in Pakistan-occupied Gilgit-Baltistan have intensified their sit-in protests at Sost Dry Port. They are demanding the enforcement of court orders that halted tax collection by customs officials. The protests, now in their second week, have escalated with the blockade of the Karakoram Highway, a crucial part of the China-Pakistan Economic Corridor (CPEC), disrupting traffic to and from the Pak-China border.

The traders began protesting in response to a writ petition filed by the PoGB Importer and Exporter Association. The court had issued a stay order preventing customs authorities from collecting various taxes at the Sost border station until a final decision is reached. However, traders claim that customs officials and the Federal Bureau of Revenue (FBR) are using delaying tactics to avoid implementing the court’s order.

Taxation issues in Pakistan, especially in regions like PoGB, are complex and layered. Traders frequently encounter inconsistent enforcement of tax laws, leading to confusion and disputes. Frequent changes in tax policies further complicate compliance, making it both expensive and difficult for traders to adhere to new regulations. Despite court rulings against specific taxes, enforcement is hindered by delays and resistance from authorities.

Additionally, corruption among tax officials, such as demands for bribes or facilitation payments, adds to the challenges and costs of compliance. Delays in processing tax documents and refunds also worsen cash flow problems for traders, making effective business operations even more difficult.

Pakistan mainly exports raw materials and agricultural products, while it imports a diverse range of manufactured goods, machinery, and technology from China. Pakistan’s economic dependency on Chinese imports for essential products like machinery, electronics, and energy resources leaves it vulnerable to fluctuations in global trade conditions and economic shifts in China. Although Chinese investments, particularly through the China-Pakistan Economic Corridor (CPEC), are significant, they are often focused on specific sectors like infrastructure and energy, which may not immediately benefit Pakistan’s broader economy. Despite this imbalance, the trade relationship is crucial for Pakistan, granting access to one of the largest and fastest-growing markets, enhancing Pakistan’s export opportunities in textiles and agriculture.