Shipping agents have requested the government to withdraw the proposed 16 percent federal excise duty (FED) on services at the country's ports and terminals. According to sources the shipping agents are of the view that the new levy would increase the cost of doing business in Pakistan, where the ports are already considered to be among the world's most expensive ones.
Terming it as most disturbing aspect of the new federal budget, shipping agents contend that effect of the FED, which was introduced by the government through SRO No 475(I)/2009 and SRO No 478(I)/2009 last Saturday, would prove to be negative in various respects, they added.
In this regard, Pakistan Ship Agents Association Chairman Mohammad A Rajpar had also sent a letter calling for the urgent attention of Advisor to Prime Minister on Finance, Revenue Shaukat Tarin on Friday, said the sources.
"Pakistani Ports are... six times more expensive than Dubai, four times more expensive than Colombo, 20 percent more expensive than Mumbai," the letter said.
It said that the proposed 16 percent addition to various port services would exacerbate the already exorbitant cost of using local ports.
By imposing FED, Islamabad would be doing "opposite" to the ports world over, where the rates were being reduced in view of prevailing global recession. Moreover, the move would also aggravate the row between traders and container terminal operators over the level of terminal charges, the sources said.
They said PSAA fears that the 16 percent duty would not only add to the price of imports that would ultimately shoot the inflation up, but also its effects would be compounded at each stage of cargo handling at the terminals, where a container goes through various stages.
"Enhancing the cost of port and terminal services would serve to reduce demand thus preventing investment and capacity enhancement leading in turn to higher prices," the letter said.