PESHAWAR: Members of the business community have said the imposition of two percent Infrastructure Development Cess (IDC) by provincial government on commercial value of export consignments has left a drastic impact on business in the province by shrinking export upto 70 percent.

Leading businessmen from KP including known exporter, Khalid Sultan and Coordinator Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI), Zia-ul-Haq Sarhadi have expressed the fear that if the decision is not withdrawn, it would further reduce export volume from the province, affecting livelihood of thousands of people.

In a joint press statement issued here on Wednesday, both Khalid Sultan and Zia-ul-Haq Sarhadi said a large number of export businesses have been diverted to other provinces after levy of two percent cess in Khyber Pakhtunkhwa.

“Taxation on commercial value of export consignment amounts in millions over calculation and exporters are diverting transportation of goods to other provinces to avoid this unbearable financial burden,” observed Khalid Sultan.

Export of sugar to Afghanistan has been totally diverted to Chaman border post because of a levy of a huge amount of Rs2 million duty on each truck, Khalid claimed.

Diversion of sugar laden trucks from KP to Balochistan costs around two to three hundred thousands rupees which is a good option for businessmen to avoid payment of Rs2 million, he explained.

The export of perishable items including vegetable, fruits, meat, poultry, eggs etc have also been diverted from Peshawar to airports of other cities, he continued.

Similarly, he added, exports of other items which usually were exported from Peshawar airport, dryport and Torkham border post, have been diverted to other cities of the country, impacting annual revenue generation of the government.

Khalid Sultan also expressed the fear of reduction in flights of international airlines from Peshawar in wake of reduction of revenue in cargo business.

He said Emirates flights carry around two tonnes of cargo goods from Peshawar to international destinations and reduction in this source of earning can ensue in reduction in flights.

Zia Sarhadi lamented extension of Infrastructure Development Cess on reverse cargo under Afghan Transit Trade.

Quoting clause IX Article 32 of the Afghanistan Pakistan Transit Trade Agreement (APTTA 2010), Zia said goods destined for Afghanistan under Afghan Transit Trade are not subject to payment of imports or export duties and taxes.

“The Infrastructure Development Cess is actually 2% on duty and taxes whereas at Torkham they added 2% on commercial value. Since cess cannot be imposed on Afghan goods because there is no duty or taxes on Afghan transit goods,” Zia argued.

“Excessive taxation always incurs losses for businesses and government as well and concerned authorities in KP are requested to take a review of the decision besides evaluating outcome of the levy on ongoing business of the province,” suggested both Khalid Sultan and Zia Sarhadi.

They said in prevailing circumstances, businessmen are already facing a lot of pressure in competition with international markets due to increase in production cost of local products because of the high price of electricity, such a levy is uncalled for and will badly impact export of the province.

They requested Chief Minister Khyber Pakhtunkhwa, Ali Amin Gandapur to intervene and save dwindling exports of the province from the burden of heavy taxation in the shape of a levy of two percent Infrastructure Development Cess.

Copyright Business Recorder, 2024