ISLAMABAD: Pakistan steel manufacturers and melters have taken a tax anomaly as a serious threat to survival to settle areas steel industry and demanded of the government to review its possible decision of granting 100 % concession of sales tax and income tax to former FATA/PATA based steel industry in 2021-22 budget.
The steel industry of settled area is liable to pay 17 % sales tax plus 1 % income tax that count around Rs 22000 per ton to its production, but these taxes have been proposed to waive -off for former FATA/ PATA based steel industry in upcoming budget for two years .
The proposed concessions of taxes to steel industry based in former FATA/ PATA , if approved in budget 2021-22, would have devastating affect on steel industry of settled areas and would force it to close down subsequently.
Huge difference of Rs 22000 or even more in taxes per ton between steel industry of former FATA/ PATA and settled areas would not be matched and resultantly steel industry in entire Pakistan will not survive the losses and shut down may be in couple of years.
The steel industry’s representatives including Abbas Akbar of Aisha Steel, Mian Akram Farid of Pak Steel, Khalid Javed of Ittehad Steel raised the issue of tax anomaly at a press cinference here on Thursday.
Abbas Akbar told the mediamen that tax anomaly will have unbearable impact on steel industry of settled areas and force it to crumble down to leave millions of workers jobless, besides making the government to lose taxes of billions of rupees.
“We are here today to tell the government that its proposed concessions for former FATA/ PATA steel units will result in complete deletion of steel industry of settled areas”, worried Abbas Akbar said at the press conference.
Mian Akram Farid said it was duty of the government to withdraw duty on import or iron ore when its price in international market has shot up to $ 500 plus per ton.
Abbas Akbar told a questioner that rise in steel prices in local market was due to surge in iron ore prices in international market.
Mian Akram Farid argued other countries have done reduction in taxes to help their steel industries absorb unprecedented increase in iron ore prices in international market. He suggested that the government should reduce taxes on iron ore import to cut down steel prices in local market.
The PTI government is apparently intending to grant conession in taxes to encourage industrial activity in far- flung former FATA/PATA , but if it had taken into account number of steel industries currently operating in that area it would have reached to final conclusion that the proposal of concessionary taxes regime for that area was based on dishonesty and lust to make money by a particular group at the cost of steel industry of entire settled area.
At present former FATA/ PATA have 50 steel producing units against 250 steel industries of settled areas. Are these figures not enough to expose that entire exercise of granting conessions to former FATA/PATA steel indusrty was based on ill intention? .
Any decision to this effect will result in windfall profit to steel industry of former FATA/ PATA area at the cost of steel industry of settled area which will pay its huge price and so will Pakistan.