The All Iron Steel Merchants Association (AISMA) has called for tax relief measures to safeguard the interests of the business community in the wake of the coronavirus pandemic.
President AISMA Hammad Poonawala has said that during this spreading pandemic of Covid-19 entire world is experiencing economic crisis and moving towards a global recession which may be worse than the great depression.
Pakistan, which has already experienced low growth rates in recent years, cannot escape recession and the lockdown has resulted in complete closure of business for the last three weeks. In these tough times, there is a need to take some tax structural reforms and measures to protect the businesses, particularly the SMEs.
Chairman AISMA said that steel and cement industry has been completely ignored in the relief package for the construction industry. Ignoring steel industry will definitely hamper obtaining desired results from the relief package for the construction industry, he added.
He said that the importers of iron and steel are facing a lot of difficulties in the retirement of documents from the banks due to closure of business resulting into liquidity shortfall.
"We request the authorities concerned to issue directions to the banks to get import consignments cleared and place them at bonded warehouse under lien at importers' expense as importers are willing to deposit a reasonable margin as security to the bank which will be adjusted at the time when final payments are made," he added.
For smooth functioning and ease of doing business, the general sales tax must be reduced from 17 percent to 9 percent, which should be uniform for registered and unregistered buyers to curb the issuance of fake invoices which is causing colossal loss to the national exchequer, Poonawala proposed
The advance income tax at the import stage is higher for the commercial steel importers vis-à-vis industrial importers, he said and suggested that the advance income tax at 3 percent be brought down.
He said that on behalf of AISMA, Chairman of Import Committee Sadiq Gogan has already submitted several suggestions to the Prime Minister of Pakistan, Finance Advisor and Governor State Bank for the revival of business activities.
Sadiq Gogan in his proposals has pointed out that the regulatory duty (RD) on imports of hot-rolled (HR) material is being collected at a rate of 12.5 percent to 17.5 percent which was imposed in order to give protection to Pakistan Steel Mills Corporation, as they were the only manufacturers of HR in Pakistan.
As Pakistan Steel Mills Corporation is not operative since 2015, so there seems to be no justification for collection of any sort of RD on HR. Therefore, RD should be withdrawn for all the commercial importers as well as the industrial manufacturers, he demanded.
He also pointed out iron and steel products are not luxuries rather these are necessary industrial raw material for many associated industries thus making its imports inevitable due to inability of local industries to fulfill the demand for the same.
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