Karachi, October 10, 2024 – Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has strongly condemned the recent decisions by the governments of Khyber Pakhtunkhwa (KP) and Balochistan to impose an Infrastructure Development Cess (IDC) on both imports and exports.
Sheikh labeled the move as “anti-business” and “anti-export,” expressing concern over the negative impact it would have on Pakistan’s already fragile export sector.
Sheikh emphasized that the FPCCI, being the apex trade body, is receiving overwhelming feedback from chambers, associations, and trade bodies across the country, all of whom are advocating for the reversal of these “counterproductive measures.”
He elaborated on the detrimental effects such policies have on international trade, particularly exports. “International markets are highly competitive, and any increase in the cost of production, whether through duties, taxes, or this new IDC on temporary imports of raw materials, directly impacts the fulfillment of export orders in a timely, profitable, and competitive manner,” Sheikh said.
He also noted that the FPCCI has long opposed the IDC on imports, as it increases costs unnecessarily. However, the recent decision by provincial governments to extend this cess to exports as well marks a new level of concern for the business community. According to Sheikh, Balochistan has imposed a 1.15% IDC on both imports and exports, along with an additional charge of one paisa per kilometer, while KP has levied a 2% cess on both imports and exports.
FPCCI’s President called on the federal government, urging Prime Minister Shehbaz Sharif and the Special Investment Facilitation Council (SIFC) to intervene and reverse the IDC across all provinces. “It is against the national interest to make our exports more expensive when we are striving to compete in global markets,” he added.
In an effort to enhance Pakistan’s export competitiveness, Sheikh proposed a series of economic reforms. He called for the reintroduction and improvement of the Temporary Economic Relief Facility (TERF), the Export Finance Scheme (EFS), and the Long-Term Financing Facility (LTFF). These measures, he believes, are crucial to boosting industrialization, investments, and export activities.
Saquib Fayyaz Magoon, Senior Vice President of FPCCI, echoed these concerns. He highlighted that Pakistan already suffers from the highest cost of doing business in the region, exacerbated by a 17.5% key policy rate, high electricity tariffs, and rising gas prices. “The least the provincial governments can do is avoid further aggravating the cost and ease-of-doing-business challenges we already face,” Magoon added.
The FPCCI leadership’s strong criticism underscores the growing frustration within Pakistan’s business community, which sees these policies as roadblocks to economic growth and export expansion. The chamber continues to lobby for pro-business reforms and a reversal of policies that it believes undermine Pakistan’s economic competitiveness on the global stage.