Karachi, August 6, 2025 – The Sindh government has extended a conditional proposal to the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to reduce the infrastructure development cess to 1%, provided all pending court cases against the cess are collectively withdrawn by the business community and corporate sector.
In a press release issued by FPCCI, it was revealed that Mukesh Kumar Chawla, Sindh’s Provincial Minister for Excise, Taxation, and Narcotics Control, offered this proposal during a meeting with FPCCI leadership. The minister stated that the Sindh government is prepared to reduce the current cess rate from 1.85% to 1.0% and maintain it at that level for the next three years—if legal proceedings initiated by businesses are retracted. He also expressed willingness to consider withdrawing the cess on solar panel imports to encourage clean energy adoption.
The FPCCI President, Atif Ikram Sheikh, raised key concerns about the infrastructure development cess (IDC), particularly its recent increase from 1.25% to as high as 1.85% in Sindh. He emphasized that the business community is dissatisfied due to the financial burden, legal ambiguities, and the absence of visible infrastructure improvements despite the substantial cess collections. He underscored the need for Sindh to demonstrate transparency in cess utilization.
Regarding the delayed issuance of vehicle number plates, the Sindh minister informed FPCCI that around 200,000 plates will be delivered within the coming week. Additionally, a new production facility is planned at the Civic Center in Karachi to resolve the issue permanently.
Saquib Fayyaz Magoon, Senior Vice President of FPCCI, acknowledged that the recent dialogue with the Sindh government marks a step toward resolving long-standing disputes over the cess. However, he stressed that the business community remains cautious and wants concrete actions and transparent outcomes. He reiterated FPCCI’s demand for withdrawal of the cess on solar panels to promote sustainable practices.
Abdul Mohamin Khan, Vice President and Regional Chairman (Sindh) of FPCCI, highlighted the adverse impact of the cess on export competitiveness. He argued that levying cess on temporary imports under the Export Facilitation Scheme (EFS) is counterproductive, as it undermines cost efficiency for export-oriented industries. He called on Sindh to exempt such imports from IDC.
The FPCCI reaffirmed its role in gathering industry-wide feedback and pledged to continue constructive engagement with Sindh to achieve relief on cess-related concerns.