10 November 2015 - The Pakistan Ship Breakers Association (PSBA) on Monday said that the government needs to provide a level playing field to the local steel industry if it wants to pull it back from the verge of collapse.
“We have created thousands of jobs and if prompt action is not taken, then the government will lose at least Rs11.6 billion in taxes from our industry alone,” PSBA Executive Committee member Shoaib Sultan stated in a press release.
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The release said that due to ineffective steel policies, the Federal Board of Revenue (FBR) has lost approximately Rs17 billion in revenue generation. The shipbreaking industry, which is the largest formalised industry of Balochistan, contributed Rs12.6 billion in taxes during fiscal year 2014-2015 (FY2014-15).
Currently, in the first quarter of FY2015-16, the shipbreaking industry of Balochistan has only contributed Rs400 million in taxes and revenue generation with a yearly outlook of only Rs1 billion for the current financial year.
Pakistan Steel Re-rolling Mills Association (PSRMA) has also approached FBR saying that the import of steel bar, angle, channel, girder beams (finished products) should be stopped.
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The association has recommended that regulatory duty on finished steel products must be increased to at least 30% and sales tax must be enhanced to 30% from 17% on imported finished steel products in order to provide a level playing field.
This will result in an increased revenue collection of Rs22,000 per ton on finished products, it said.
The government imposed 15% regulatory duty on steel imports in January 2015 mainly to counter Chinese steel imports.
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As international steel prices of finished products have crashed, all local steel sectors are feeling the pinch.
Around 20,000 tons of finished products have arrived in October and if the trend persists then FBR can easily mop up additional Rs5.5 billion revenue if the recommendation of PSRMA is acted upon, added the press release.