ISLAMABAD: Commerce Minister Jam Kamal has requested the Khyber Pakhtunkhwa government to reconsider imposition of infrastructure cess as it is affecting export sector of the country.
In a letter to Chief Minister KPK Ali Amin Gandapur, the commerce minister said the Commerce Ministry has been approached by many chambers of commerce and trade associations representing the export sector, regarding the adverse impact of infrastructure cess levied by the provincial government on their competitiveness.
“MoC understands that the measure is aimed at raising provincial revenues and broadening the tax base, but it is having unintended prohibitive consequences for our nation’s exports,” he added.
‘Export from KP drastically cut after imposition of 2pc cess’
According to the ministry, in his recent series of consultations with the Sectoral Councils of 16 leading export sectors of Pakistan, representing more than 90 per cent of Pakistan’s exports, one of the common impediments highlighted by the stakeholders was the adverse impact of provincial infrastructure development cess on their export competitiveness.
The additional financial burden imposed on exporters ultimately results in higher costs of goods in international markets, reducing the country’s ability to compete effectively. This is particularly concerning given the fragile state of the national economy and the critical need for Pakistan to expand its export base, the minister added.
Kamal further stated that besides increasing the transaction costs for exporters, the cess affects the overall ease of doing business in the country.
Many stakeholders have raised concerns about the increased operational costs being faced by them due to this levy.
“At a time when we are trying to foster a more business-friendly environment, such impediments can diminish the hard-earned progress we have made in attracting foreign investment and boosting our exports,” he said, requesting to reconsider the imposition of the infrastructure development cess.
The withdrawal of this levy would not only ease the burden on exporters but also send a positive signal to the business community, both domestically and internationally, the minister said, adding that he is confident that with chief minister KPK’s support and leadership, a conducive environment can be created which can benefit the entire country, particularly, in these challenging economic times.
Copyright Business Recorder, 2024