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Pakistan–Afghanistan Border Closure Causes Rs2.5 Billion Loss to KP, Revenue Falls by 37%
The prolonged closure of the Pakistan–Afghanistan border has caused significant financial losses to the Khyber Pakhtunkhwa (KP) government, shaking the provincial treasury and sharply reducing revenue collections during the current fiscal year.
According to official data, the KP government suffered a loss of approximately Rs2.5 billion during the first five months of the ongoing financial year due to disruptions in cross-border trade. The closure has particularly affected revenue generated through the Infrastructure Development Cess (IDC).
Government figures reveal that only Rs2.95 billion was collected under the IDC during the first five months of the current fiscal year, compared to Rs4.69 billion collected during the same period last year. This represents a historic decline of 37 percent in revenue.
Officials stated that the shutdown of border crossings led to a significant drop in exports from the province, directly impacting government income. Additionally, legal challenges filed by traders against the Infrastructure Development Cess, along with court-issued stay orders, further contributed to the decline in collections.
Although the court has recently ruled in favor of the provincial government, officials noted that traders still owe approximately Rs1.5 billion in unpaid dues. They warned that unless this amount is recovered, the shortfall in revenue may continue.
Economic experts have cautioned that prolonged border closures and trade disruptions are inflicting serious damage on the provincial economy. They warned that if the situation does not improve, the negative impact on revenue could extend into the next fiscal year, putting further strain on the province’s financial stability.