KARACHI: Business community has demanded the government of reducing tax rates to half for at least three months in order to provide relief to industry and dilute impact of coronavirus.
Karachi Chamber of Commerce and Industry (KCCI) has demanded the government to announce 50 percent reduction for the next three months in: tax rates (Excise & Sales Tax etc.); petroleum products prices; utility rates (gas & electricity) and interest rates.
KCCI President Agha Shahab Ahmed Khan in a letter sent to Chairman of Cabinet Committee on Energy Asad Umer, President KCCI said that although K-Electric deferred ISPA arrears till April 30, 2020 on KCCI’s intervention but the sword keeps on hanging over the business & industrial community as they will once again be facing the exorbitant electricity bills after April 30, 2020, making it impossible for the industrialists to pay such huge amounts included in the normal bills that would rise sharply by lakhs of rupees.
Hence, the Cabinet Committee on Energy must ask the Ministry of Energy to issue a notification of not collecting ISPA arrears, he stressed, adding that K-Electric should be directed not to charge ISPA arrears and the government should take care of it.
He pointed out that the imposition of ISPA arrears retrospectively from July 2019 to December 2019 would intensify the hardships for industries as it was impossible to pay such huge amounts particularly in the current scenario when the disaster caused by the outbreak of coronavirus has brought down the industrial production to somewhere around 25 to 30 percent.
He was of the opinion that most of the relief measures and initiatives taken so far would not yield the desired results as they do not cover all the industries and businesses, hence the government will have to look into the possibility of announcing the proposed 50 percent reduction in all the above mentioned categories which would certainly provide cash flow to industries and reduce chances of sacking the laborers.
“The next three months are very critical and the industries have to survive at any cost during this period hence, the government will have to provide the desperately needed stimulus to the industries in shape of 50 percent reduction in taxation, petroleum prices, utility bills and interest rates”, he added.
He requested the Federal Government to permanently withdraw Industrial Support Package Adjustment (ISPA) arrears which would provide some relief to the industries particularly in a very critical ongoing situation when on one hand, their production has drastically gone down while on the other, they are facing additional cost of doing business by paying salaries and arranging food stuff etc. for their idle workers and daily wage earners who remain confined to their homes due to the lockdown imposed to prevent further spread of the life-threatening disease caused by COVID-19.
President KCCI hoped that the government would pay attention to KCCI’s suggestions and accordingly, take practical steps for the survival of the poor masses which depends on the survival of the Industries.