KARACHI:
Pakistan Steel Manufacturer’s Association (PSMA) has demanded that the
government collect tax on the total weight of ships that are brought for
dismantling at the Gadani’s ship-breaking yard.
A
PSMA official requesting anonymity said the Federal Board of Revenue (FBR) only
collected sales tax on 70.5 percent weight of ships from the ship-breaking
industry. He went on to add that the ship-breakers were also exempt from paying
20 percent customs duty, which hindered a level-playing field in the entire
steel industry.
“While the government is considering all
options to increase its tax earnings, it should seriously consider withdrawing
exemptions to the ship-breaking industry.”
According to the official, the practice of not
charging sales tax on 29.5 percent of a scrap ship has been going on for almost
five years now and has caused losses worth billions of rupees to the national
exchequer.
Apart
from ship plates and re-meltable scrap, which is taxed by the FBR,
shipbreakers get countless expensive revenue generating items from a ship
including aluminum, copper, brass, steel ropes, chains, electric cables and
switches, machines kitchen items, wood, bunker oil, lubricants and paints which
are sold separately.
The
PSM official said the unfair and unjustified tax and duty exemptions to the
shipbreaking industry is discouraging steel manufacturers who are not only
paying all the duties and taxes.
“If
the government wants to achieve sustainable growth in the steel sector, it must
discourage such exemptions and try to provide a level-playing field to all the
players of steel industry.
“In
its budget proposals to the FBR, the steel melting sector had requested the
imposition of a five percent customs duty and Rs3,500 per ton specific duty on
ships imported for dismantling in the country to give a level-playing field and
equal competition to all sectors,” he said.
Steel
manufacturers also requested FBR to setup a committee to review the taxes and
duty structure on different sectors of the steel industry. “The committee
should have members from steel melters, ship-breaking industry and FBR so that
equal competition in the steel sector can be achieved,” he said.
Source: The News. 27 June 2013
No comments:
Post a Comment