Sales tax on steel industry reduced
Steel-melting units will pay Rs7 per unit of electricity consumed.
ISLAMABAD:
As parliament debates next year’s budget, the government on Thursday decided to reduce sales tax on the steel industry from Rs8 per electricity unit consumed in production process to Rs7 per unit while succumbing to pressure from lobbyists.
The move is likely to cause a revenue loss of Rs2 billion, bringing the amount estimated to be collected in additional taxes to Rs61 billion through various measures planned for next fiscal year.
The decision was taken after a meeting between Finance Minister Dr Abdul Hafeez Shaikh and a delegation of Pakistan Steel Melters Association, led by Imtiaz Safdar Warraich, State Minister for Interior.
“The delegation of steel-melting industry requested to reduce the sales tax from Rs8 per unit to Rs6 per unit, on which the finance minister asked the Federal Board of Revenue (FBR) to revise the tax to Rs7 per unit,” said an official announcement.
Announcing next year’s taxation measures earlier, FBR’s Member Inland Revenue Shahid Hussain Asad had said that an increase of Rs2 per unit was being made to make the presumptive tax regime unattractive as the government wanted the steel industry to come into the normal tax regime.
The FBR had estimated that it would generate Rs4 billion by increasing the sales tax rate by Rs2 per unit.
For the next fiscal year, the government has set a Rs2.381 trillion tax target that includes Rs63 billion in additional taxes.
On the demand of reducing the withholding tax from 3% to 1%, the finance minister also asked the FBR to look into this matter in consultation with representatives of the steel industry and present a report shortly, said the finance ministry.
The association chairman claimed that the industry was going through a very difficult time and was unable to survive. He said the issues of sales tax, withholding tax and fuel adjustment surcharge were creating problems.
Shaikh assured the steel industry, which enjoys the blessings of the federal minister of state belonging to PPP, that the government would give more relief to it.
The association chairman further claimed that the imposition of fuel adjustment charges on a six monthly basis has put a huge burden on the industry. He proposed that the fuel adjustment charges should be collected on a monthly basis in order to avoid the financial shock.
Replying to the proposal, the finance minister asked the Planning Commission deputy chairman to consult the relevant departments for meeting the demand.
The finance minister also constituted a committee comprising Planning Commission deputy chairman, secretary industries and representatives of FBR to look into the issues and challenges faced by the steel industry and to formulate recommendations within a month.
Published in The Express Tribune, June 8th, 2012.
As parliament debates next year’s budget, the government on Thursday decided to reduce sales tax on the steel industry from Rs8 per electricity unit consumed in production process to Rs7 per unit while succumbing to pressure from lobbyists.
The move is likely to cause a revenue loss of Rs2 billion, bringing the amount estimated to be collected in additional taxes to Rs61 billion through various measures planned for next fiscal year.
The decision was taken after a meeting between Finance Minister Dr Abdul Hafeez Shaikh and a delegation of Pakistan Steel Melters Association, led by Imtiaz Safdar Warraich, State Minister for Interior.
“The delegation of steel-melting industry requested to reduce the sales tax from Rs8 per unit to Rs6 per unit, on which the finance minister asked the Federal Board of Revenue (FBR) to revise the tax to Rs7 per unit,” said an official announcement.
Announcing next year’s taxation measures earlier, FBR’s Member Inland Revenue Shahid Hussain Asad had said that an increase of Rs2 per unit was being made to make the presumptive tax regime unattractive as the government wanted the steel industry to come into the normal tax regime.
The FBR had estimated that it would generate Rs4 billion by increasing the sales tax rate by Rs2 per unit.
For the next fiscal year, the government has set a Rs2.381 trillion tax target that includes Rs63 billion in additional taxes.
On the demand of reducing the withholding tax from 3% to 1%, the finance minister also asked the FBR to look into this matter in consultation with representatives of the steel industry and present a report shortly, said the finance ministry.
The association chairman claimed that the industry was going through a very difficult time and was unable to survive. He said the issues of sales tax, withholding tax and fuel adjustment surcharge were creating problems.
Shaikh assured the steel industry, which enjoys the blessings of the federal minister of state belonging to PPP, that the government would give more relief to it.
The association chairman further claimed that the imposition of fuel adjustment charges on a six monthly basis has put a huge burden on the industry. He proposed that the fuel adjustment charges should be collected on a monthly basis in order to avoid the financial shock.
Replying to the proposal, the finance minister asked the Planning Commission deputy chairman to consult the relevant departments for meeting the demand.
The finance minister also constituted a committee comprising Planning Commission deputy chairman, secretary industries and representatives of FBR to look into the issues and challenges faced by the steel industry and to formulate recommendations within a month.
Published in The Express Tribune, June 8th, 2012.