KP govt exempts WFP aid trucks from levy, reduces tax on Afghan transit trade

PESHAWAR: The Khyber Pakhtunkhwa (KP) government has approved an exemption from cess for vehicles of the World Food Programme (WFP) transporting humanitarian aid to Afghanistan.

The provincial cabinet meeting chaired by KP Chief Minister Ali Amin Gandapur approved the waiver of the levy.

The WFP and the Afghan government earlier requested the KP government for the waiver.

According to documents available with HUM News English, the KP finance secretary briefed the provincial cabinet saying that under the Khyber Pakhtunkhwa Infrastructure Development Cess Act, a two per cent cess had been imposed on the transportation of locally manufactured goods and trade-related consignments within the province. This cess was later extended to Afghan transit trade, he said.

He told the cabinet that on December 6, 2024, WFP representatives called on the provincial finance adviser and requested an exemption from cess tax for WFP vehicles carrying humanitarian aid to Afghanistan via the Torkham border.

WFP officials had said that the United Nations and its affiliated organizations should be exempted from taxes for humanitarian aid.

Also read: Pakistan launches investigation into abnormal surge in Afghan transit trade

Following this, the provincial finance adviser submitted a summary for cabinet approval, proposing a cess tax exemption for WFP vehicles transporting aid through the Torkham border.

The finance secretary told the provincial cabinet that a delegation from the Afghan consulate in Peshawar had also expressed concerns about the 2 per cent cess on Afghan transit trade vehicles, raising the financial burden on Afghan traders.

In response, the finance adviser had clarified that the tax revenue was used for infrastructure development in the province, ensuring better roads and lower transportation costs for traders.

After extensive deliberations, the provincial cabinet approved a cess tax exemption for WFP aid vehicles passing through the Torkham border and reduced the cess on Afghan transit trade vehicles from two per cent to one per cent.