PESHAWAR: Khyber Pakhtunkhwa Chief Minister Muhammad Sohail Afridi announced on Friday that KP provincial taxes would be abolished in the merged districts and Malakand Division.
Afridi made the announcement during a consultative meeting at the Chief Minister’s House attended by political leaders, business representatives and members of civil society.
The decision covers taxes falling within the provincial government’s jurisdiction. Federal tax measures introduced under the Finance Act 2026 remain outside the stated scope of the announcement.
Special Assistant to the Chief Minister on Information and Public Relations Shafi Jan said the withdrawal of federal tax exemptions had caused concern among residents and businesses in the merged districts and Malakand Division.
Jan accused the federal government of failing to provide funds promised to the merged districts under the National Finance Commission Award. He said the districts had been administratively integrated into Khyber Pakhtunkhwa, but their financial integration remained incomplete.
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The provincial official said the funding shortfall had affected development projects and public-welfare programmes in communities already facing economic and social pressures after years of militancy.
Khyber Pakhtunkhwa Governor Faisal Karim Kundi had opposed the new taxes a day earlier. He urged the provincial government to withdraw levies under its authority and proposed a joint federal-provincial committee to address the broader dispute, according to an official Governor’s House statement.
The merged districts were formerly part of the Federally Administered Tribal Areas and were incorporated into Khyber Pakhtunkhwa under the 25th Constitutional Amendment in 2018.
