Islamabad: Imposition of General Sales Tax on machinery imports is detrimental for expansion of industrial base in Pakistan, an official of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said Sunday.
Slapping 17 per cent GST on imports of machinery, equipment etc has put brakes on expansion and modernisation plans of many industrial concerns while scores have shelved idea to set up new factories, said Raza Khan, Chairman Coordination, FPCCI.
Speaking to business community at FPCCI Capital Office, he said that cost of doing business is increasing during these times of sluggish growth which is not in the national interest.
Such moves have raised new questions over the country’s prospects for economic stabilisation, he said adding that it will contribute to unemployment, anxiety, lawlessness and reduced tax collection.
Raza Khan said that manufacturing and SME sector should be encouraged to play their due role in national development with peace of mind.
The combination of inflation, rising debt, high interest rates, energy shortfall, law and order situation and slow economic growth are growing problems which shouldn’t be ignored, the FPCCI official noted.
He said that the cumulative effect of imposition of 17 pc GST on machine imports has raised final cost by around 22-30 per cent, depending on situation, which is unbearable.
Some businessmen have started shifting their units to regional countries offering incentives and enabling policies, he informed.
Moves that result in reduced industrial capacity, lower share of manufacturing in total national output, and shift to the services sector will never help country achieve a sufficient surplus of exports over imports to maintain external balance, warned Raza Khan.
He demanded that that SRO 448(I) should be reversed to impose SRO 575(I) in proper shape to save country from deindustrialisation.
17 per cent GST is not a tax but a fine and punishment inflicted on business community on the dictates of foreign masters, he said.
For more information, contact:
Muhammad Raza Khan,
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
FPCCI, Capital Office, Islamabad,
Former President, Haripur Chamber of Commerce,
Founder President, Islamabad Chamber of Commerce.
Tel: FPCCI +92-51-2251891-3. Fax +92-51-251894
Tel: Business +92-51-4434200-5. Fax +92-514434203