Budget proposal: Cement manufacturers push for lower taxes

APCMA says FBR should consider lower FED to boost consumption

Our Correspondent March 15, 2016

LAHORE: All Pakistan Cement Manufacturers Association (APCMA) has suggested the FBR to reduce Federal Excise Duty (FED) step-wise to zero as announced by the previous government to encourage cement off take since this is not a luxury item.

In its budget proposals sent to the chairman of FBR, APCMA Chairman Muhammad Ali Tabba stated that it ought to be noted that the cement industry is subject to FED 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 Rs100 per bag.

“This incidence of high taxation encourages evasion and negatively impacts consumption. The abolishment of excise duty not only eliminates tax evasion but also enhances cement consumption at reduced price,” he added.

He added that certain services are being taxed twice - first, under the independent Provincial Sales Tax Laws, especially in Sindh, Khyber-Pakhtunkhwa and Punjab. These services are then still taxable under the Federal Excise Act 2005, which is tantamount to double taxation.

The abolishment of excise duty would not only reduce cost of doing business, but also eliminate double taxation.


Similarly, he added, before preferring appeal to the Office of Commissioner (Appeals) or Appellate Tribunal, a taxpayer is required to deposit the impugned duty demanded or penalty imposed in the appealable order. “This mandatory compulsion is considered as a hindrance in the dispensation of justice,” he added.

He said the identical provisions in Income Tax and Sales Tax has already been repealed, therefore, it is suggested that such provisions should also be removed from the excise law.

Cheap imports

Moreover, chairman of APCMA added, Iranian cement is being flooded into border areas of Balochistan and is being sold at lower prices.

“This phenomenon is very detrimental for local manufacturers and in the longer run can challenge the survival of local industry. Additional regulatory duty should be immediately imposed on imports of Iranian cement and some prior approval mechanism from the government should be in place regarding quality of Iranian cement being imported in Pakistan,’ requested Chairman APCMA.

Published in The Express Tribune, March 16th, 2016.

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