The Multan Chambers of Commerce and Industry (MCCI) has reiterated its demand that the government should review its decision of imposing 17 percent general sales tax (GST) on machinery imports. "Manufacturing and SME sectors should be encouraged to play their due role in national development with peace of mind," the President of MCCI, Shahid Naseem Khokhar, said.
He said the cumulative effect of imposition of 17 percent GST on machinery imports has raised final cost by around 22-30 percent. He said the combination of inflation, rising debt, high interest rates, energy shortfall, law and order situation and slow economic growth are creating problems for doing business which should not be ignored. The 17 percent GST on import of machinery, equipment has put brakes on expansion and modernisation plans of many industrial concerns while scores have shelved idea to set up new factories, he claimed.
Some businessmen have started shifting their units to regional countries offering incentives and enabling policies, he added. He said cost of doing business was increasing during these times of sluggish growth, which was not in the national interest. Moves that result in reduced industrial capacity, lower share of manufacturing in total national output and shift to the services sector will never help the country achieve sufficient surplus of exports over imports to maintain external balance, he added.