APCMA chief wants import duty on coal withdrawn

Calls tax ‘injustice to cement industry’.


Our Correspondent June 25, 2014

KARACHI: All Pakistan Cement Manufacturers’ Association (Apcma) Chairman Muhammad Ali Tabba has requested the government to withdraw import duty on coal, citing it as “injustice towards the industry”.

“Coal is now the only fuel to have import duty imposed on it, which is sheer injustice toward the cement industry,” said Tabba. “The industry is the predominant consumer of imported coal in Pakistan and consumes almost 95% of the 4.5 million tons imported annually.”

At the same time, he added, other industries have switched to coal and many others are also converting to coal due to gas shortages. The duty will nullify the positive initiative of the government to use coal as an alternative energy source, Tabba said.

The Apcma chief added that the cement industry has spent millions of dollars to switch its plants from the expensive furnace oil in order to produce cheaper cement for the country’s consumers as well as making prices internationally competitive.

“If the government imposes import duty on our main source of fuel, our competitive advantage will be significantly reduced. It is difficult to comprehend that the government is encouraging coal-based power generation but, on the other hand, it is imposing a discriminatory tax on imported coal.”

He said that while expecting a further increase in capacity utilisation the cement sector is absorbing huge budget impacts already. ‘Though the tax is minimal it could prove detrimental to future investments in alternative energy projects. The government must realise that this kind of action is jeopardising their initiatives of fetching investments in alternative energy projects.”

He added that the cement sector of the country is already facing many issues including massive load-shedding, shortage of labour, slowdown of construction activities, low exports, and losses on coal imports due to no freight subsidies by the government.

It is worth adding here that different cost-push increase includes axle-load limitation from highway authorities, budgetary measures, gas and electricity tariff hike, and devaluation of Pakistani rupee. He mentioned that during the federal budget 2013-14 the cement industry was brought within the purview of ‘Third Schedule’ and that had increased the overall tax burden.

He said given the energy crisis the government is keenly involved in creating alternative energy sources in the country. However, it is also taking adversary measures that confuse potential investors.

Published in The Express Tribune, June 26th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ