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'Taxation with Representation' in PoK


When Islamabad begins to fork out money rather than gather it in, the signal is that trouble is brewing. That’s what happened recently when Prime Minister Shahbaz Sharif allocated a PKR 23 billion grant for Pakistan-occupied Kashmir, or what it fancifully calls ‘Azad Kashmir’, a thin slice of the larger part of Kashmir that it occupied back in 1947, and from which it is more in the habit of extracting all it can for itself rather than giving it anything at all. But after months of protests, which escalated this week, it seems the PM’s hand was forced. But trouble is far from over.


Recent footage from the capital, Muzaffarabad, shows massive rallies, with people in their thousands coming out to protest against the high prices of basic essentials like flour and the severe power cuts in the area. This is despite the fact that the region provides Pakistan with plentiful power, with some 23 projects having a total installed capacity of 2,370 MW, a good slice of the total installed capacity of 10,852 MW as of 2022. The potential is even greater.


Of total hydropower resources, the region, together with Gilgit Baltistan, accounts for roughly half of the total hydropower potential. And here’s the irony: Gilgit sees about 20 hours of outages, while Muzzafarabad is marginally better, with about 12 hours on good days. It's not just that. A petition from Kashmiris abroad notes Pakistan buys electricity from Kashmir for Rs 2.59 per unit and sells it back to Pakistan-occupied Kashmir for Rs 59 per unit. It is hardly surprising that the locals are outraged and tired. And don’t forget. Central government employees get free electricity. And the bottom line. Electricity is most susceptible to outages during the winter, when temperatures drop to minus ten or below.


Taxation without representation

Then there’s the issue of taxation. The Pakistan-occupied Jammu and Kashmir tax system was recently connected with the national tax system with a view to increasing the tax base in an increasingly strait jacketed economy. That’s all very well. But here’s the problem: Pakistan-occupied Kashmir is not part of Pakistan. It sits outside its constitutionally decided boundaries and yet is taxed across the board by the occupying country. That’s what the present violent protests are about. Though far from American shores, the cry of ‘no taxation without representation', which was the bedrock of American independence from the British, is precisely what the locals of the area want.

In theory, there is a ‘President’ who at present is Barrister Sultan Mehmood and a ‘Prime Minister’, Anwarul Haq, who was conveniently ‘expelled’ from Imran Khan’s party and thereafter was elected unopposed with 48 votes from the 52-member assembly. In reality, the area is a fiefdom under the Federal Minister of Kashmir and Gilgit Baltistan, and for any serious stuff, it runs through a Council of which the Pakistan PM heads. In simple words, the ‘Prime Minister’ and his so-called cabinet have fewer powers than a district magistrate would in India. And here’s the cherry on top: The National Finance Commission allots fully 57 per cent of direct taxes to the other provinces, while the allotments to these ‘independent’ states are unspecified and remain at the whim of the minister in Islamabad. Since ‘Azad’ persons cannot have a seat in Parliament, the problem is obvious.


Blood, toil, and trouble

As of now, the Pakistani Rangers are out on the streets, with social media showing trucks speeding into the area via Kohala and scenes of buildings and cars burning, with a reported 14 dead and hundreds injured so far. As of the time of this writing, matters seem to have gotten worse with more scenes of arson and cries for freedom from Pakistan.

With the deaths, matters have worsened, leading to allegations of Indian involvement. That is ironic. The protests in both Pakistan-occupied Kashmir and Gilgit Baltistan have been going on for at least a year, and this is simply the culmination of people’s frustration. With a noisy election on, New Delhi hardly has the bandwidth to consider these events, and no, there was no ‘tiranga’ waved during the protests. There is no 'India factor'. There are a lot of people who have a lot to bear and have simply given way. But sooner or later, India will have to consider the situation. To claim PoK is not enough; there is a need to ensure some deliverance to the people, and more importantly, to be seen to be doing it in a transparent and democratic manner. One way is to offer an aid package; another is to raise this in the appropriate forums. So far, Islamabad has painted India as the villain in the Kashmir issue. It's time to show just who the good guy is: open that purse.


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