In the budget for 2009-10 that is to be announced on June 13, the government of Pakistan is considering slashing excise duty on cement by 20 to 25 per cent as the existing duty stands at Rs900 per ton, said a senior official at the Ministry of Finance.

“Cement dispatches are currently subject to payment of Rs900 as federal excise duty per ton, 16 per cent general sales tax, one per cent special excise duty, 0.1 per cent marking fee of ex-factory price and provincial duties and taxes. These taxes come to around Rs96 per bag, which is the highest in the world.”

“The government, at present is levying 16 per cent GST on the excise duty paid value of the cement, which is a very unethical and coercive measure of taxation authorities. Such things will also be reviewed while making the final decision on giving tax relief to the industry.”

When contacted, Advisor to Prime Minister on Finance Shaukat Tarin, confirmed that the government would provide tax relief to the cement industry, so that the construction industry is encouraged to flourish and accelerate economic growth. He said that the government will not levy any further tax on this industry; rather decrease the CED to a reasonable level.

However, he said that the decision about the volume of tax relief would be taken keeping in view revenue collection projections of the next year.