1.8pc infrastructure cess imposed by Sindh govt: BMP seeks early abolition

LAHORE: The Federation of Pakistan Chambers of Commerce & Industry’s Businessmen Panel (BMP) on Wednesday urged the immediate abolition of the 1.8 percent infrastructure cess imposed by the Sindh government, warning that the levy has become a major barrier to Pakistan’s already struggling export sector.

BMP chairman and FPCCI former president Mian Anjum Nisar said that at a time when exporters are battling high financial costs, uncompetitive energy tariffs, and shrinking global demand, the imposition of an additional provincial tax is both unjustified and economically damaging.

According to him, this cess has pushed the cost of doing business to an unsustainable level and is actively eroding Pakistan’s export competitiveness, particularly when regional competitors are offering incentives while Pakistan is adding new layers of taxation.

Mian Anjum Nisar said the export sector is already in a state of stagnation, with industries facing unprecedented challenges due to rising interest rates, expensive energy, unpredictable supply-chain costs, and an unstable business environment. In such circumstances, adding a tax of nearly two percent on goods passing through Sindh has become a direct blow to exporters who are already operating at thin margins.

He maintained that there is no justification for imposing a tax that ultimately operates as a penalty on exports and contradicts the national objective of promoting export-led growth.

The BMP chief said the cess has been presented as an “infrastructure development” measure, but exporters have seen no meaningful improvement in infrastructure that could justify the billions collected each year. He said that roads, port corridors, internal transport routes, and drainage systems in Karachi continue to collapse repeatedly under the slightest stress, proving that the revenue collected through the cess is not being translated into tangible improvements.

Mian Anjum Nisar said that exporters are already paying the highest energy tariffs in the region, alongside elevated borrowing costs that have squeezed their working capital. He said “Pakistan needs to be reducing the number of taxes, not increasing them, if it aims to penetrate global markets.”

He said that by allowing provinces to impose levies on exports or on freight related to export consignments, the federal government has unintentionally created a situation where the national export agenda is undermined at the sub-national level. He appealed to the federal government to immediately intervene and ensure that exports remain exempt from all forms of provincial levies, including this infrastructure cess, which has now become a major impediment to export-led recovery.

Copyright Business Recorder, 2025