LAHORE: All Pakistan Cement Manufacturers Association (APCMA), in its budget proposals, has urged Federal Board of Revenue (FBR) chairman to abolish excise duty, which will not only eliminate tax evasion but also enhance cement consumption at reduced price.
APCMA Chairman Mohammad Ali Tabba pointed out that cement industry is subject to Federal Excise Duty at the rate of 5% of retail price and General Sales Tax at the rate of 17% of maximum retail price and these taxes come to around Rs95 per bag. He requested that the government should reduce FED stepwise to zero as announced by the previous government to encourage cement off-take as this is not a luxury item.
Similarly, he said, cement industry is using coal as fuel for its kiln and federal government through the Finance Act 2014 imposed 1% import duty on coal while previously it was zero. “It is proposed to restore the pre-budget duty structure relating to coal i.e. subject to nil import duty,” he suggested.
The APCMA chairman stated that sales tax rate in Pakistan is very high as compared to global tax rates; therefore, sales tax rate should be reduced to 12.5% in order to reduce the already soaring cost of doing business in Pakistan.
“It should further be gradually reduced to 10% over the next three years for registered entities because the reduced rate will encourage the registration of the unregistered taxpayers to avail the benefits of input adjustment,” stated Tabba.
He said coal is one of the few fuels to have import duty which is a sheer injustice to the cement industry that is the predominant consumer of imported coal in Pakistan and consumes almost 95% of the 4.5 million tons imported annually.
“Other industries have switched to coal and many others are also converting to coal due to non-availability of gas, so this duty is to nullify the positive initiative of the government to use coal as an alternate energy source,’ reasoned Tabba.
