LAHORE  - All Pakistan Cement Manufacturers Association (APCMA) has submitted its budget proposals to chairman of Federal Board of Revenue (FBR), drawing his attention towards the issues the cement industry is facing. “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. These taxes come to around Rs 95 per bag. This incidence of high taxation encourages evasion and negatively impacts consumption,” stated Mohammad Ali Tabba, Chairman APCMA. 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. Abolishment of excise duty will not only eliminate tax evasion but also enhance cement consumption at reduced price, he said.

Similarly, 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. 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.

Chairman Apcma 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 added that through the Finance Act, 2014, withdrawal of SRO 575, import duty at the rate increased from 10% and a tariff rate of 20% have been imposed on import of waste and scrap of tyres. It is proposed that this fuel should be subject to nil import duty to bring this alternate fuel at par with other fuels at zero percent custom duty, he suggested.