Gas cess to double cost of doing business

KARACHI: Gas cess will double the cost of doing business without contributing to any development, a leading businessman said.
“Industries don’t have basic infrastructure, which will bring Pakistan’s exports down in the coming days,” said Rashid Ahmad Siddiqui, president of Korangi Association of Trade and Industry (KATI).
“With lack of water, electricity and gas, how can we compete internationally,” Siddiqui said in an interview with The News.
Recently, the government enacted gas infrastructure development cess law, inviting criticism from the business community.
KATI President said the tax system is based on blackmailing tactics.
He said when they do some business with a party they verify the party through the FBR (Federal Board of Revenue) whether the party is an active tax payer. After a couple of years, when the other party defaults, the FBR starts harassing the first party for nonpayment of sales tax despite its full payment to the other party. “FBR deducts the sales tax of defaulter party from our accounts,” he said. “This is blackmailing.”
Siddiqui said Pakistan should make its foreign policy friendly. Pakistan’s visa acquiring process is very difficult for the businessmen of other countries.
“Foreigners do not think of Pakistan as a comfortable zone,” he said.
He said Pakistan’s exports are limited to a very few items, like textile, leather, surgical goods and rice while there is a potential in the fields of pharmaceuticals, confectionary and biscuits etc. “We can export agricultural products as well by cultivating the barren lands,” he added.
KATI chief said businessmen community has abandoned hopes of something good from the civilian government, who pays no attention to the burning issues.
The issues of KATI, which is one of the largest industrial estates of Pakistan, are related to infrastructure and law and order.
Industries are suffering from poor conditions of roads and street lights and unavailability of electricity, gas and water, said Siddiqui, who has 35 years of experience in printing and construction under Afeef group.
Established in mid 60s and made operational in 1970, KATI is spread over an area of 8,500 acres. More than 4,500 industrial, commercial, and service concerns operate in the industrial area, providing employment to roughly 0.2 million workers.
Industries of large, medium and small scale contribute revenue of Rs270 million on daily basis. There are 612 member industries of KATI in the area.
Textiles, jute, wool, leather, pharmaceuticals, cosmetics, sanitary, chemicals, engineering, rubber products, paint, oil refineries, food and automobiles industry and other industries are situated in the area.
There is representation from all industrial sectors in the area.
Around 40 percent of the Pakistan’s leather exports are routed from there.
There are 372 textile mills, contributing seven percent to the total textile exports from Pakistan.
A huge 78 percent of the crude oil used all over Pakistan is refined in the two refiners of Korangi industrial area. Similarly, there are 42 fully operational flour mills.
The industrial is also emerging as the new financial hub of Karachi by having 20 fully operational branches of all major and minor banks, including numerous offices of different insurance companies.
KATI president said there has been a decline in extortion and snatchings but the crime has not been fully stopped.