LCCI voices concern over reimposition of GIDC

The Lahore Chamber of Commerce and Industry (LCCI) on Thursday took a strong exception to the re-imposition of Gas Infrastructure Development Cess (GIDC) and called upon the federal government to immediately withdraw it. The LCCI President Ijaz A Mumtaz said the GIDC was not only a violation of Articles 8 and 18 of the Constitution but it would also give a deadly blow to the economic activities in the country.
"The cess was imposed in January 2012 through a Gas Infrastructure Development Cess (GIDC) Act 2011 on the pretext of mobilising funds for infrastructure development work for Iran-Pakistan gas pipeline project and since the government had already stopped work on this mega project, therefore, it has no justification to re-impose GIDC through an ordinance, he said."
The Supreme Court has already declared this case illegal, confirming decisions by PHC and SHC. He urged the government to facilitate growth of businesses which would automatically generate more tax revenue, create more jobs and increase exports instead of introducing such harsh measures, he added.
Gas Infrastructure Development Cess (GIDC), Ijaz said, would make Pakistani merchandise uncompetitive in the global marketplace and hurt the country's exports. The value-added and export-oriented industries have been earning valuable foreign exchange to the tune of billions of rupees, he said, adding that GIDC would increase the cost of production.
While quoting the example of textile sector, the LCCI President said it was one of the most value-added and export-oriented sectors in Pakistan, accounts for more than 60 percent of total exports of the country. "Ninety five percent of its inputs are locally produced and by making energy out of their reach, government is in fact curbing the use of local inputs." He said that even the slightest raise in the cost of production, at this critical juncture, would, therefore, spell doom and oust Pakistani merchandise from the international export market which would deprive the exchequer of much-needed valuable foreign exchange to the tune of billions of dollars. The LCCI President said the re-imposition of the Cess would also aggravate food inflation as the rise in the cost would be passed on to the end consumers and may lower productivity due to higher input costs.