FPCCI chief seeks clarification about IDC on imports in Sindh

KARACHI: Atif Ikram Sheikh, President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has strongly sought the clarification on infrastructure development cess (IDC) on imports in Sindh as it has been even further increased from 1.25 percent to 1.80 percent - 1.85 percent.

As per details, Mukesh Kumar Chawla, Sindh Minister of Excise, Taxation and Narcotics visited FPCCI on Wednesday for a detailed, interactive and consultative session on the longstanding issue.

Atif Ikram Sheikh explained that the business community in Sindh is primarily concerned about the financial strain, legal validity and lack of visible infrastructure improvements despite the substantial revenue generated from the cess. While the Sindh government defends the cess as essential for infrastructure maintenance, the ongoing legal battles and perceived mismanagement of funds continue to fuel tensions.

However, Chawla offered that provided the businesses and companies can all collectively withdraw all court cases vis-à-vis infrastructure development cess, the Sindh Government is ready to lower the cess to 1.0 percent from the current 1.85 percent – and, keep it at that level for the next 3 years. He also agreed to consider withdrawing cess on solar panels.

On the issues of delay in the issuance of number plates, the minister informed that 200,000 number plates will be delivered within a week; and, additionally, the government is planning to have the number plates generating plant installed at the Civic Centre, Karachi, in order to fully resolve the issue.

Saquib Fayyaz Magoon, SVP FPCCI, apprised that the recent efforts to resolve the cess issue through dialogue and collaboration indicate a potential path forward; but, the business community remains cautious – seeking tangible outcomes and greater transparency. He mentioned that cess on solar panels should be withdrawn.

He said that FPCCI, being the apex body, is receiving feedback from all chambers, associations and trade bodies from various sectors to advocate reversal of these counterproductive measures, he added.

Abdul Mohamin Khan, VP & Regional Chairman Sindh, FPCCI, elaborated that international export markets are very competitive; and, any addition in cost of production through duties, taxes or cess on temporary imports; i.e., raw materials used for export-oriented production have direct detrimental effects on fulfilment of export orders in a profitable, timely and competitive manner.

He proposed that the imports falling under Export Facilitation Scheme (EFS) should be exempt from IDC as these are essentially aimed for industrial production meant for exports – and, the imposition of the cess on those imports makes no economic sense and it undermines the very spirit of EFS.

Copyright Business Recorder, 2025