ISLAMABAD: The measures taken by the government in budget 2024-25 especially gradual reduction in tax exemptions given to Fata/Pata and the decision of bringing sale & purchase of local scrap into tax net/ documentation will help to revive the local steel industry and will increase revenues, said Pakistan Association of Large Steel Producers (PALSP) here Saturday.
A statement issued by the Secretary General of the Association said PALSP is the most powerful voice of the steel sector, and it has appreciated steps taken by the Govt of Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb for addressing the steel industry’s most critical issues.
These measures will help in increasing Govt revenue of hundreds of billions of rupees. ‘Gradual reduction in the tax exemptions given to erstwhile Fata/Pata will create level playing field and a win-win situation for industry.
The measure will enhance Govt revenue; it will promote documentation and would help to establishing fair taxation system uniformly applicable across all regions and sectors of the economy.’
The second measure taken in the Budget of exempting local scrap from the levy of Sales Tax to curb the menace of fake inputs and flying invoices is a highly commendable decision which will plug revenue leakages and establish fair competition in the market.
‘Last couple of years posed existential challenge to the steel sector due to the unprecedented economic crisis and challenging business scenario. Factors like massive currency depreciation, sky high borrowing cost as well as other factors resulted in massive increase in cost of production and posed serious challenges to the steel sector. As a consequence of this situation, a predominant number of the steel industry are operating at the bare minimum capacity of plus minus 30%, many plants have been shut down and those who are able to survive are making huge losses and are being forced to opt for significant layoffs.
In this situation Govt’s plan to revive industry through concrete budgetary measures is very encouraging for the steel industry and an effective implementation of these measures will lead to industrial and economic stability in the country.
Steel industry also appreciates Govt’s pro-industry measures like reduction in power tariffs, rationalisation of interest/ policy rates although in a small way and decrease in petroleum prices. Govt has reduced electricity tariffs rates by Rs10.69 per unit for the industry and the export sector. This measure will give relief to industries, and would enhance their competitiveness in the global market.
Copyright Business Recorder, 2024
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