The federal government is likely to announce a special relief package in the budget for the industry of terrorism-hit province, ie, North West Frontier Province (NWFP), it is learnt reliably. In this regard, deliberations have already been completed at the top level in which a critical role was played by the provincial government, the sources added.
According to a survey conducted by the Industrialist's Association Peshawar (IAP) 37 percent negative growth has been recorded in the industrial sector of Peshawar as compared to overall 7.6 percent negative growth in Large Scale Manufacturing (LSM). Meanwhile the Association has written a letter to the Prime Minister's Advisor on Finance, Shaukat Tarin, asking for relief for the war-affected industry. IAP has submitted the following proposals to the government for consideration: No load shedding of electricity and natural gas on industries in Peshawar.
Withholding tax on cash withdrawal or companies registered with the SECP (only) be stopped and these payments be made at the time of submitting of tax returns instead of in advance. State Bank of Pakistan (SBP) should issue prudential regulation to permit banks to defer loan repayment for one year similar to textile sector, last year.
No audit for the next two years of registered companies/industries who have submitted income tax returns. Relief on mark-up should be extended on the pattern of textile sector; all banks should be instructed not to charge more than three percent above their cost of funds for the working capital of industries in NWFP.
The IAP has also cited the example of Bangladesh where upper limit on all industries is 2.5 percent.
According to the association, all the proposals have no revenue loss to the GoP but would go a long way in easing the anger of the people of NWFP towards the federal government. Islamabad Chamber of Commerce and Industry has also proposed that the government should extend the 10-year tax holiday for manufacturing sector in NWFP to revive business and economic activities in the province.
Mian Shaukat Masud, President, ICCI in a statement said on Sunday that the province has sustained a loss of over Rs 515 billion since the war on terror started.
He said due to militancy, in less than one year about 843 production units have closed down in NWFP bringing down the number of operational industrial units to 594 in December 2008 while around 34000 workers have lost jobs during the year: the workforce engaged in the industrial sector has dropped from 58,000 a year ago to 24,000 in 2009. Majority of industrial units have closed in the war-hit area which includes 287 units from Swat, 178 from Buner, 36 from Malakand, 32 from Dir and 115 from Mardan.
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