Construction equipment, machinery: CAP urges FBR to abolish import duty

The Constructors Association of Pakistan has urged the Federal Board of Revenue to waive off the import duty on construction equipment and machinery to help construction companies mechanise operations.
Chairman Engineer Arshad Dad, in a letter to the revenue chairman, has drawn the attention towards the duties and taxes ranging from 33 to 65 percent, which adds to the already high priced items specially vehicle mounted machinery and excavators, bulldozers. He said under such heavy duties Pakistani construction companies could not even afford second hand equipment and machinery which is being auctioned in UAE.
On a recent auction by a world renowned company in Dubai, he said these second-hand equipment and machinery were unaffordable considering the reserve prices, for Pakistanis with the present duty and tax structure. "Another impediment is that second hand machinery older than 10 years cannot be imported in the country. The price of even 10 years old machinery is unaffordable adding to this the duty and taxes and the total price become exorbitant," he said. "Plant, Machinery, Equipment and Construction Material which are not manufactured locally were previously allowed Benefit of Duty, Advance Sales Tax, Additional Sales Tax and Advance Income Tax on reduce rates vide, S.R.O.530(I)/2005 and S.R.O.575(I)/2006. At present, No SRO benefit is allowed. Only FTA with China is applicable with some percentage concession for customs duties, while Advance Sales Tax and Income Tax benefits are not available.
"Under the above circumstances the Pakistani Construction Industry (specially the SME's) are unable to mechanise their operation and increase capacity. This also hinders the adoption of new technology and innovations, thus limiting the local companies to deliver larger projects thus making country dependent on foreign contractors who charge much higher rates."
The chairman also suggested that the above facilities only be allowed to constructors who hold a valid license from Pakistan Engineering Council and get a project specific certificate from Constructors Association of Pakistan to ensure transparency and avoid misuse of such incentives.