PESHAWAR: Khyber Pakhtunkhwa (KP) is facing severe financial losses under the Infrastructure Development Cess (IDC) due to the prolonged closure of Pak-Afghan border and suspension of cross-border trade and transit operations.
According to the Khyber Pakhtunkhwa Revenue Authority (KPRA), a sharp decline in IDC collection has been recorded during the current financial year.
The KP government has approached the federal government over the serious revenue shortfall, economic stagnation and emerging employment crisis.
In view of the gravity of the situation, the letter has recommended convening a high-level meeting comprising federal and provincial stakeholders.
According to official figures, during the seven months from July to January of the previous financial year 2024-25, the total IDC revenue stood at Rs7.42 billion, while in the current financial year, the same revenue has dropped to Rs3.48 billion. As a result, the province has suffered a direct financial loss of approximately Rs3.94 billion in just seven months due to the Pak-Afghan border closure.
Traders are facing a severe liquidity crunch as export and transit operations remain suspended, preventing them from receiving payments for sold goods. This has significantly impaired their ability to clear outstanding statutory dues.
Meanwhile, Chief Minister’s Adviser on Finance, Muzzamil Aslam, in a letter to Federal Minister for Commerce Jam Kamal Khan, has warned that the suspension of border trade has led to an alarming decline in IDC revenues, causing serious negative impacts on the provincial economy.
He stated that due to the continued closure of Pak-Afghan border, Khyber Pakhtunkhwa is facing acute revenue losses, economic stagnation and an emerging employment crisis. He added that the IDC collection has declined by approximately 80 percent this year, resulting in a massive revenue shortfall for the province.
According to the letter, the initial disruption in IDC collection was caused by a court stay order, which was vacated in November 2025, after which recovery efforts were immediately initiated. However, due to the continued closure of Pak-Afghan border, these efforts proved ineffective, and cross-border trade remained severely disrupted.
