LCCI blasts the imposition of additional taxes on industries

LAHORE: The imposition of additional taxes on various sectors and withdrawal of tax exemptions will affect trade and industry negatively, an official said on Friday.

“Supplementary finance bill will affect trade and industry. [The] government has imposed taxes on various sectors and withdrawn exemptions in order to meet the conditions of the International Monetary Fund (IMF),” Lahore Chamber of Commerce and Industries (LCCI) president Mian Nauman Kabir said.

“It will further enhance the cost of doing business, increase inflation, hinder business growth and hit the confidence of foreign as well as local investors,” he added.

LCCI president said that the government has proposed a 17 per cent sales tax worth Rs343 billion on more than 150 items which would hinder economic growth.

The imposition of 17 per cent sales tax on imported plant and machinery would make it difficult for the industrial sector, particularly Small and Medium Enterprises (SMEs) to undertake technological up-gradation and hence, the export competitiveness would be adversely affected, he stated.

This measure could start a new wave of de-industrialisation in the country, adding that the manufacturing of hi-tech sectors would also be affected by the proposed measures in the mini-budget.

The government on one hand introduced the Mobile Device Manufacturing Policy to encourage local production while on the other hand has imposed sales tax on import of machinery, Kabir said.

LCCI president said that industry was heavily dependent on imports of raw materials as they were not available locally, saying that the imposition of sales tax on raw materials would hinder the growth of the pharmaceutical sector which has been showing good performance since the last couple of years.

“Our pharmaceutical exports have increased to $273 million in 2020/21 as compared to $215 million in 2019/20. This measure can dent the export competitiveness of our pharma sector and reverse the trend of increasing exports,” he said.