The News reported that members of
Pakistan Steel Manufacturers Association have demanded the government to
withdraw tax exemptions from ship-breaking industry to create level-playing
field for all players in the industry.
Taking to journalists, Mr Abbas
Akberali of Amreli Steels Limited and Mr Khalid Khan of Abbas Steel Group, said
that exemptions of a few taxes and duties to the ship breaking industry and
recent increase in the electricity tariff by PKR 5,000 per tonne for the
association’s members, have given big advantages to the ship breaking industry
over members.
Mr Akberali said that “Economic
advantages to ship-breakers make their products cheaper by PKR 12,000 to PKR
16,000 per tonne than the products made by other players in the industry.”
He said that there is an
agreement between the ship breakers and other players in the steel industry
that the difference in price of ship breakers and others’ products will not be
greater than PKR 1,200 per tonne.
He said that “The huge difference
of PKR 12,000 to PKR 16,000 per tonne is constantly pushing the steel
manufacturers on the back foot and if the situation persists, time is not far
that they will have to close their units down to avoid losses. In its budget
proposals to the Federal Board of Revenue, the steel melting sector had
requested imposition of a five% customs duty and PKR 3,500 per tonne specific
duty on ships imported for dismantling in the country to give a level playing
field and equal competition to all sectors.”
Moreover, the government should
collect sales tax on 100% weight of ships rather than on 70.5% weight as of
today.
The officials said that the
practice of not charging sales tax on 29.5% of a scrap ship has been going on
for almost five to six years now and has caused losses worth billions of rupees
to the national exchequer.
They said that the unfair and
unjustified tax and duty exemptions to the ship breaking industry is
discouraging the steel manufacturers who are 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.
Mr Akberali said that “We are
utilizing around 50 to 55% capacity of installed production, at present, the
absence of level playing field to the players other than ship-breakers may
result in closure of steel manufacturing units in Pakistan.”
He said that “If such units are
closed, thousands of workers will lose their jobs. Besides, the situation will
also result in no collection of taxes from the industry.”
Source:
steel guru. 11 September 2013
http://www.steelguru.com/middle_east_news/Pakistani_steel_manufacturers_demand_levelplaying_field/324674.html
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