Peshawar:The recent decision by Khyber Pakhtunkhwa government of imposing a levy of two percent Infrastructure Development Cess (IDC) on commercial value of export consignments has left drastic impact on business in the province by shrinking export upto 70 percent.
Leading businessmen from KP including known exporter, Khalid Sultan and Coordinator Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI), Zia-ul-Haq Sarhadi have expressed the fear that if the decision is not withdrawn, it would further reduce export volume from the province, affecting livelihood of thousands of people.
In a joint press statement issued here on Wednesday, both Khalid Sultan and Zia-ul-Haq Sarhadi said a large number of export businesses have been diverted to other provinces after levy of two percent cess in Khyber Pakhtunkhwa.
‘Taxation on commercial value of export consignment amounts in millions over calculation and exporters are diverting transportation of goods to other province to avoid this unbearable financial burde
n,’ observed Khalid Sultan.
Export of sugar to Afghanistan has been totally diverted to Chaman border post because of levy of huge amount of Rs. Two million duty on each truck, Khalid claimed.
Diversion of sugar laden truck from KP to Baluchistan costs around Rs. Two to Three hundred thousands which is a good option for businessman to avoid payment of Rs. Two million, he explained.
The export of perishable items including vegetable, fruits, meat, poultry, eggs etc have also been diverted from Peshawar to airports of other cities, he continued.
Similarly, he added, export of other items which usually were exported from Peshawar airport, dryport and Torkhem border post, have been diverted to other cities of the country, impacting annual revenue generation of government.
Khalid Sultan also expressed the fear of reduction in flights of international airlines from Peshawar in wake of reduction of revenue in cargo business.
He said Emirates flights carry around two tonnes of cargo goods from Peshawar to inter
national destinations and reduction in this source of earning can ensue in reduction in flights.
Zia Sarhadi lamented extension of Infrastructure Development Cess on reverse cargo under Afghan Transit Trade.
Quoting clause IX Article 32 of the Afghanistan Pakistan Transit Trade Agreement (APTTA 2010), Zia said goods destined for Afghanistan under Afghan Transit Trade are not subject to payment of imports or export duties and taxes.
‘The Infrastructure Development Cess is actually 2% on duty and taxes whereas at Torkhem they added 2% on commercial value. Since cess cannot be imposed on Afghan goods because there is no duty or taxes on Afghan transit goods,’ Zia argued.
‘Excessive taxation always incur losses for businesses and government as well and concerned authorities in KP are requested to take a review of the decision besides evaluating outcome of the levy on ongoing business of the province,’ suggested both Khalid Sultan and Zia Sarhadi.
They said in prevailing circumstances, businessmen are already
facing a lot of pressure in competition with international markets due to increase in production cost of local products because of high price of electricity, such a levy is uncalled for and will badly impact export of the province.
They requested Chief Minister Khyber Pakhtunkhwa, Ali Amin Gandapure to intervene and save dwindling export of the province from burden of heavy taxation in shape of levy of two percent Infrastructure Development Cess.