Industrialists and businessmen have urged the government to utilise the funds collected under gas infrastructure development cess (GIDC) levy on the stalled gas projects rather than demanding more capital.
“Laying of gas pipelines at the cost of present industry’s destruction is not a wise decision,” said Karachi Chamber of Commerce and Industry (KCCI) former president Junaid Ismail Makda while talking to The Express Tribune.
He added that the Covid-19 crisis shook the export industry as well as local businesses and collecting unnecessary taxes at such a time could lead to complete closure of industries, which can result in economic disaster for the country. The official said that the government of Pakistan aimed to construct multiple gas projects including Iran-Pakistan (IP) gas pipeline project, Turkmenistan Afghanistan Pakistan India (TAPI) pipeline project, North South gas pipeline project and underground gas storage.
Citing figures, he said the cost of these projects was estimated at Rs2,251 billion out of which Pakistan agreed to bear Rs397.6 billion.
“The government has already collected Rs295 billion in this regard from GIDC levy and the amount is enough for the two local projects,” he said. He lamented that out of Rs295 billion, only Rs0.4 billion were spent by the government.
“It is highly unlikely that the government will spend even the collected amount in near future so it is not sensible to collect the cess at a time when the country’s industry is facing highest ever liquidity crunch,” he said. Two out of the four projects, TAPI and IP, are completely stalled at present and it is unclear when work on them will resume.
“The former is delayed due to unfriendly relationship amongst the countries involved while the latter is halted due to sanctions imposed by the US on Iran,” said Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Secretary Nijabat Ali.
The industry expressed serious reservations over the letter filed by the Finance Division in the court where misrepresentation was made while mentioning GIDC accrued amount of Rs752 billion while the requirement of funds for gas projects was only Rs397.6 billion. How can the government collect the accrued amount itself, which is higher than the projects’ estimated cost, he questioned.
Published in The Express Tribune, September 3rd, 2020.
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