KARACHI: After the Khyber Pakhtunkhwa government imposed a two per cent infrastructure cess last month, industries face another challenge as the Balochistan government has imposed up to 1.5pc cess on the export value plus one paisa per kilometre.
Like the consignments routed through KP, this additional cost will now apply to all exports via Balochistan to Afghanistan and Central Asia, as well as Iran, Turkiye and beyond, Pakistan Business Council (PBC) chief executive Ehsan Malik informed Federal Commerce Minister Jam Kamal Khan in a letter.
Market diversification through regional trade is an important pillar of Pakistan’s export growth strategy. He stressed that regional trade is also an enabler for broadening the export basket, as goods in demand in Central Asia, Afghanistan, and Iran are different from “our traditional exports”.
Pakistan’s eastern neighbour is rapidly building market share in Central Asia and Russia and is an active trading partner of Iran. “The provincial export levies will undermine the competitiveness of our exports,” he warned.
After KP, Balochistan imposed 1.5pc infrastructure cess
Mr Malik sought intervention from Mr Kamal with both the KP and Balochistan governments to have the export cess removed.
Additionally, he noted that the Sindh government’s infrastructure cess on imported inputs for export value-addition is a matter of concern.
He recommended the federal government convince all provinces through the Council of Common Interests for the exemption of exports from direct and indirect provincial levies.
“Exports are vital to the country. All governments need to support this national effort,” Mr Malik remarked.
Meanwhile, Hub Chamber of Commerce and Industry (HCCI) President Yakoob H. Karim has asked the Balochistan government to withdraw the notice to collect infrastructure cess on all exports.
Ismail Suttar, the former HCCI president, expressed concern about the country’s need to boost exports and reduce reliance on imports. He finds it contradictory that while there is a need to achieve these goals, additional taxes are being imposed, which could discourage existing businesses and hinder new investments in the province.
Exports cannot be taxed, and they should be incentivised “if we are serious about the progress of the country and the prosperity of the people of Pakistan,” he remarked.
Published in Dawn, October 5th, 2024
