By: Muhammad Ijaz Afridi
PESHAWAR: Cantonment Board Peshawar has stopped the Excise and Taxation Department Khyber Pakhtunkhwa from collecting professional tax in the Cantonment Board areas.
The Cantonment Board has taken the stand that Cantonment Boards are under the administration of the Ministry of Defence; therefore, provincial laws cannot be enforced here, and it has made it clear that Excise and Taxation can neither impose professional tax in the Cantonment areas nor is it authorised to collect it.
The letter issued by the Cantonment Board Peshawar to the Secretary Excise and Taxation Khyber Pakhtunkhwa has detailed the constitutional and legal points.
According to the letter, professional tax is a local tax whose collection authority is vested in local bodies. In the case of Cantonment areas, this authority has been given to the Cantonment Board under the Cantonment Act 1924, which is a federal law.
The letter explains that Cantonment Boards work under the federal government and the Ministry of Defence because the armed forces are deployed in these areas. Therefore, legislation related to cantonment areas falls under the federal jurisdiction. According to the Cantonment Board Peshawar, under the Constitution, legislation related to cantonment areas is within the powers of the federal government. Although provincial governments can impose a professional tax under the Constitution, this power does not apply to cantonment areas because these areas are subject to federal law.
The letter also clarifies that if any law of the provincial assembly conflicts with a law of Parliament, then, according to the Constitution, the law of Parliament is considered superior.
The letter, citing court decisions, states that in a court decision on October 13, 2023, the imposition of professional tax by the Cantonment Board was declared unconstitutional; however, the Cantonment Act 1924 was later amended to remove this legal ambiguity. This amendment re-enacted Section 60, under which the Cantonment Board was given the power to levy and collect taxes, fees and other charges listed in Schedule VII. Professional tax has been formally included in Schedule VII.
The letter states that the Federal Legislative List was also amended by the 26th Constitutional Amendment, after which the power to legislate regarding local taxes and fees in the Cantonment areas was clearly vested in the Federation.
According to the letter, after this amendment, the court decision of October 13, 2023, was not effective. According to the Cantonment Board Peshawar, the Excise and Taxation Department was informed in writing on this matter earlier on April 30, 2025, that the collection of professional tax should be stopped in the cantonment areas after June 30, 2025; however, the provincial department did not comply with this instruction. Now, the Cantonment Board Peshawar has once again directed the Excise Department to immediately stop the collection of professional tax in the cantonment areas and inform the Cantonment Board in writing in this regard.
