KARACHI – Federation of Pakistan Chambers
of Commerce and Industry (FPCCI) has urged Federal Board of Revenue (FBR) to
withdraw certain SROs to save shipping industry.
In a statement here on Thursday, FPCCI Vice
Presidents Naveed Jan Baloch, Shaheen Ilyas Sarwana and Muhammad Ali has called
upon Chairman FBR, Ali Arshad Hakim to save shipbreaking industry from
deterioration. It has been overburdened by arbitrary imposition of huge taxes.
They referred to SRO 140 (1)/2013
increasing income tax from 1pc to 5 per cent.
He recommended to provide relief to the
industry under SRO 212(1) 2013 by treating them as an industry and reducing
income tax rate to 1 per cent.
They pointed out that the steel re-melting
industry is required to pay sales tax at a reduced rate after their sale, whereas
the shipbreaking industry is subject to high rates of sales tax in advance on
their imports. Referring to SRO
243(1)/2013, they maintained that shipbreaking has been removed from the ambit
of special procedures leading to withdrawal of the facility of payment of sales
tax in installments.
They argued that it would be very difficult
for ship breakers to arrange funds to deposit such a huge amount of sales tax
upfront at the import stage instead of four months for ship weighing up to
10,000 LDT and eight months for ships of more than 10,000 LDT and as such
proposed to withdraw it.
They analyzed that the above SROs have been
issued one after the other within a period of one month and in turn this has
overturned the balance between the shipbreaking industry and the steel
re-melting industry. Sales tax rate was already increased from Rs 4800 to Rs
5862 vide SRO 592(1)/2012 (23% increase) in the last budget of June 2012.
This situation, they added, has compelled
ship-breakers to stop purchasing ships for the breaking.
The shipbreaking industry contributes 20
per cent of the steel sector in the country and has paid more than Rs 17
billion in taxes over the last four years. Whereas, the steel melters have a
major share but their contribution to government revenue has substantially
reduced.
The FPCCI leadership said these harsh
provisions on the labour intensive shipbreaking industry will aggravate the
poverty and unemployment conditions in Balochistan province and block the
source which supplies steel plates at cheaper rates at the behest of powerful
lobbies.
Source: the
news. 5 April 2013
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