Disproportionate tax hikes harmful for business environment: LCCI

LAHORE: The All Pakistan Cement Distributors Association (APCDA) has said that the increase in turnover tax on cement distribution from 0.25 percent to 1.25 percent has raised the tax burden five times, making it unbearable for the business community.

According to the association, cement distributors had been operating under the presumptive tax regime for several years, where tax deducted on commission was treated as the final discharge of liability. However, this system has now been abolished and replaced with a turnover tax.

These views were expressed the association’s leadership during a visit to the Lahore Chamber of Commerce and Industry (LCCI).

The APCDA delegation, led by Chairman Sheikh Abdul Majeed, met LCCI President Faheem-ur-Rehman Saigol and discussed the issues pertaining to the cement distributors.

During the meeting, detailed discussions were held on the serious financial and taxation issues being faced by cement distributors. Strong concerns were expressed over the rising burden of withholding taxes, the recent sharp increase in turnover tax and the overall pressure created by the tax system.

The LCCI President Faheem-ur-Rehman Saigol said that the business community is already facing major challenges, including high energy costs, elevated interest rates, fluctuations in the rupee and economic uncertainty. In such circumstances, increasing taxes at this pace and scale is proving highly damaging for the business environment.

He said current policies are not only increasing the cost of doing business but are also affecting the investment climate.

He added that sustainable growth in revenue can only be achieved by expanding the tax net rather than placing additional burdens on sectors that are already paying taxes.

Former FPCCI President Mian Anjum Nisar said that economic stability depends on the continuity of business activities. However, extraordinary tax increases and inconsistent policies severely damage business confidence.

He said that the increase in turnover tax from 0.25 percent to 1.25 percent is unprecedented and has multiplied business costs.

Chairman APCDA Sheikh Abdul Majeed said the price of cement per bag has increased significantly over the past two years, resulting in a substantial rise in withholding taxes and other financial obligations. This situation has made operating costs unbearable and is making it increasingly difficult for distributors to continue their businesses. He said the cement distribution sector has served as the backbone of the country’s construction industry for decades, but recent policies have placed it under severe pressure.

Copyright Business Recorder, 2026