Grant of exemption to tribal areas: Large steel producers lodge protest with Tarin

ISLAMABAD: The biggest challenge now faced by the documented sectors of tariff areas of Pakistan vis-a-vis tribal areas include high taxes/tariffs, increased cost of doing business, unchecked production/sales of substandard items, smuggling/tax evasion, and massive abuse of exemptions to the tribal areas.

In this regard, documented sectors including large steel producers, Friday, lodged a protest with the Finance Minister Shaukat Tarin on the grant of exemption to the tribal areas. A steel unit located in Rashakai Special Economic Zone has also approached the Chinese Embassy, the chairman CPEC Authority, and the secretary Board of Investment (BOI).

It said that even we cannot get any beneficial policy about tax, about freight cost, about power tariff, but these steel units in the FATA, PATA achieved this so easily. With the start of the second phase of industrial cooperation in the CPEC, more and more foreign investors will come and invest here in Pakistan, but this trade protection action will harm all foreign investors.

So please reconsider this situation and try to get the same beneficial policy for us, for all zone enterprises under the CPEC project, it added. According to the letter of the industry to Tarin, as stakeholders of the steel sector, the concerned association has been constantly making frantic efforts to get an audience with you to convey our concerns over government's decision of removal of the FED on industry operating in the FATA, PATA.

However, we were extended cold shoulder and asked to go to the FBR. On June 24th, a meeting was held with the representatives of the FATA, PATA as well as of the KP government being stakeholders, the documented sectors were not given a chance to represent our sector in the said meeting. This discrimination with our sector is very disappointing for us and we strongly protest against this.

The steel sector is termed as mother of all industries and considered as the backbone of economy. Sustainable economic growth and progress of steel sector are believed to have a strong correlation.

Pakistan steel industry is not only contributing a major chunk of revenue to the national exchequer but also, employs large number of people directly and has a critical role in the revival of the economy and especially in the construction industry as visualised by the government.

As a result, the average price of bars nosedived in Pakistan from US$695 in 2017, 778 in 2018, 726 in2019, 603 in 2020 to 659 in 2021. Despite having well-established economic significance, the mother of all industries in Pakistan has not been able to perform optimally.

It has been witnessing a major downturn and moving towards closure due to exorbitant cost of doing business, inconsistent policies, absence of a level playing field, and an unfavourable macro-economic environment. Some of the challenges or problems the steel industry is facing are: high taxes/tariffs, high cost of doing business, unchecked production and sale of sub-standard steel, large-scale abusage of exemptions given to FATA/PATA, high energy prices, market uncertainty, smuggling and tax evasion etc.

This has already forced the local investor to put their investments on hold. In order to bring the steel industry out of the current crisis and keep revenue generation intact our association has been making desperate appeals and knocking the door of every government department/ministry for finding a solution to our longstanding issues.

However, our appeals are falling on deaf ears and nobody is ready to listen and to address our genuine concerns. The situation has reached to such an extent that all such matters that could be addressed and resolved in a matter of minutes/days take months and years, and still remain unresolved, the industry added.

Copyright Business Recorder, 2021