KARACHI: Chairman of National Business Group Pakistan and President Pakistan Businessmen and Intellectuals Forum, Mian Zahid Hussain has expressed concern that steel prices are already increasing before implementation of the budget measures and the industry need supportive steps as it is an important component of the construction industry which is considered the engine of growth by the current government.
He said the troubled steel industry will suffer more due to budget measures which should be reconsidered by the government. He said that rising steel prices will hit masses who deserve to be shielded.
The uniform tax regime in erstwhile FATA/ PATA and in the rest of country as 17 percent FED/GST; exemption on long steel units and income tax exemption on steel units situated in FATA/PATA will result in a comparative advantage of Rs27000; which will result in problems for the units located elsewhere.
Talking to the stakeholders of the steel industry, the veteran business leader said that the decision of the government will make it impossible for the industry in other parts of the country to compete and survive which is catering for 96 percent of the demand while tribal areas only compromise 4 percent of the country’s steel demand.
Owners of the steel mills said that steel should be declared as Fast Moving Consumer Goods (FMG), as it’s a high volume and low percentage margin business, tax under section 113 should be revised to 0.25 as of other FMG’s and the current rate of turnover tax which is1.5 percent is unjust. They said Steel Sector must be exempted from section 8B of the Sales Tax for private limited companies also as public limited companies are already exempted. The processing cost is lower in the steel industry as compared to the heavy cost of raw materials so 8B is not justified, he added.
He noted that tax withholding liability under 236H should be withdrawn, as it’s not possible for the manufacturers to collect taxes from the retailers as steel is low margin and high turnover businesses and rates specified on retailers are also unjust and aren’t compatible with their selling margins.
Copyright Business Recorder, 2021