Multan Chamber of Commerce and Industry (MCCI) President Khawaja Muhammad Jalaluddin Roomi has hailed the Government's consideration to withdraw the withholding tax and reducing the GST rates on electricity bills.
He said in a statement that it is heartening to learn that government is devising a strategy to provide relief to the power consumers who use up to 300 units electricity a month by reducing for them the General Sales Tax (GST) from 16 percent to 6 or 7 percent.
He welcomed this move as it will prove beneficial for about 3.5 to 4 million people out of 15 million power users and provide some relief to inflation-hit poor masses. However, he also called upon the government to devise a similar concessional power tariff strategy for business and industry because high power tariff is the biggest stumbling block in the promotion and growth of commercial activities. Many industrial units have closed their operations as hike in power tariff has rendered their business unsustainable.
MCCI President said electricity tariff for the industrial sector in Pakistan is far higher than the industrial sector of regional countries. As a result of which large number of business concerns are not able to meet their export targets and warned that if the current increase in tariff is not brought down to a reasonable level, it would cause further decline in the economy in fiscal year 2009.
He said the Pakistani industrial sector is currently suffering 9 cents per unit, which is higher than the electricity tariff for the industrial sectors of South Asian region. Giving a comparison, he said that the electricity charges for the industrial sectors of Bangladesh is 5.23 cents per unit, Sri-Lanka 7.28 cents, India 8.14 cents and 8.5 cents in China, which reflects considerable decline as compared to the charges set for the Pakistani industrial sector.
Muhammad Jalaluddin Roomi said that this wide difference in the electricity tariff has badly hit the competitiveness of Pakistani products in the international market .He said that hike in the prices of electricity ultimately leads to sufficient rise in the cost of production which compels the business community to increase the prices of their outputs, and cautioned that continued hike in the electricity charges would further diminish the competitiveness of our industry, which may lead to great decrease of Pakistani made products in the international market.
He informed that the industrial sector consumes more than 40 percent of the total electricity in Pakistan and stressed upon the government to involve the business community, being the major stakeholder, in consultation before making decisions about power tariff so that business and industry may not become the victim of higher power tariff in Pakistan. He said the world over, bulk users of a product or service are rewarded by giving them concessions and this principle should also be applied for bulk power users in Pakistan as they contribute bulk revenue and deserve better treatment
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