Tax Exemptions would cost National Exchequer approximately Rs. 11 Billion!
Karachi, February 07: Pakistan Steel Melters Association (PSMA) has strongly rejected the recently issued SRO 47 (I) 2018, that allows controversial duty and tax exemptions to China State Construction Engineering Corporation Limited. This exemption of taxes and duty to Chinese company will cost national exchequer approximately 11 Billion rupees.
Under this controversial SRO, China State Construction Engineering Corporation Limited, which is working on Motorway Sukkur to Multan section, has been allowed duty free import of construction materials and machinery in Pakistan.
To record it reservations at the highest level, PSMA has drawn attention of Prime Minister Shahid Khaqan Abbasi towards this issue through a letter requesting the PM to withdraw the disputed exemptions allowed to a foreign company on the expenses of local steel sector.
In 2017, Pakistan Steel Melting Industry was coined as the fastest growing steel industry in the world, as per LSM (Large-Scale-Manufacturing) data published by SBP (State Bank of Pakistan) notes that Billet/Ingot production has grown by 62% 4MFY18 year-on year.
Hussain Agha, Senior Vice Chairman PSMA, notes “the steel Industry of Pakistan is gearing up for a massive $300 million capacity expansion within the next 24 months, which would yield multifold growth in revenue collection to our National Kitty. The Chinese are our brothers in progress and we warmly welcome CPEC, however, we must ensure that it is done on a fair and mutually benefitting basis.”
Tremendous jobs are at stake if the government gives anti-localization incentives to special companies.
Steel Industry of Pakistan generates the largest revenue amongst the growing Industrial sector of Pakistan and also aims to fulfil the upcoming demand of CPEC through providing high grade manufactured steel.
Hussain Agha, Executive Director of Agha Steel Industries said that the “first phase of Agha Steels project is expected to come online in 2018, which will directly save the government at least $180 million per annum in direct import substitution and will further generate additional taxes for our government.”
New steel projects expected to come online within the next 12 months will save our National Exchequer billions of dollars by import substitution. PSMA strongly objects any policies that could hamper growth in Pakistan and SRO 47(I)2018 will dampen future investments alongside with already gifting 11 billion rupees’ loss to government in revenue collection.
