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Friday May 24, 2024

Steel industry wants turnover tax cut to 0.5pc

Steel industry emphasises the need for equal treatment across all sectors to foster a conducive business environment for growth and investments

By Mehtab Haider
May 03, 2024
A representational image showing a steel manufacturing plant floor with  stocked metal sheet rolls. — AFP/File
A representational image showing a steel manufacturing plant floor with stocked metal sheet rolls. — AFP/File 

ISLAMABAD: The steel industry is urging the government to ensure equitable taxation by reducing the turnover or minimum tax rate to 0.5% from the existing 1.5% in the forthcoming budget for 2024-25.

The Pakistan Association of Large Steel Producers (PALSP) has appealed to Finance Minister Muhammad Aurangzeb to eliminate discrimination in the levy of turnover or minimum tax on the steel sector, aligning it with other industrial sectors.

PALSP’s communication highlights that while some favoured industries enjoy a reduced turnover tax of 0.5%, others, including the struggling steel sector, face higher rates of up to 1.25%. Despite promises of reduction in the Finance Bill 2023-24, the tax measure was not implemented in the Finance Act.

The steel industry emphasises the need for equal treatment across all sectors to foster a conducive business environment for growth and investments. Amid economic challenges, the industry asserts its crucial role in the country’s economy, contributing significantly to revenue generation and job creation.

The current economic difficulties, including currency devaluation and import dependence on raw materials, have exacerbated the steel industry’s plight. Despite its substantial contributions, the industry faces an uphill task due to high turnover tax rates and financial constraints.

Experts note that reducing turnover tax is feasible and essential for industrial growth, especially considering the sector’s importance in revenue generation and employment.

The steel industry’s plea for a reduced turnover tax rate and an extended adjustment period aims to stabilise operations and prevent closures amidst challenging economic conditions.