Cement traders go on strike to protest high taxes

LAHORE:

The cement traders association has announced that it is going on an immediate strike to protest the increase in withholding tax.

“No cement dealer will receive cement from any company from today (Saturday) onwards,” the association said.

“The tax target has increased but the business opportunities for traders and industrialists are decreasing. The higher the tax, the more people look for tax evasion avenues,” Union president Sajid Chaudhry said on Saturday.

He added that a bag of cement was available for Rs 1,500 due to the tough measures announced in the federal budget for the financial year 2024-25, which had a major negative impact on the overall cement distribution system.

In the recently enacted Finance Bill 2024, the government has increased withholding tax under Section 236H from 1% to 2.5% for non-filers, while sales tax has been levied on dealers and retailers.

“The impact of the above taxes is huge and cannot be mitigated by the rebates and discounts received by the cement companies, nor can such an amount be earned from the market as cement falls under Schedule 3 of the Sales Tax Act “, he clarified.

Also, traders and retailers are being pressured to install Point of Sale machines on the claim that cement is a fast moving consumer good (FMCG), whereas it “does not fall under the definition of FMCG”.

“Majority of traders and retailers are uneducated and unable to maintain record and operate Points of Sale as required by the Federal Board of Revenue (FBR),” added Chaudhry.

He pointed out that the traders were not able to continue their business due to such huge taxes and harassment by the FBR staff in connection with the installation of Sales Points.

“The cement industry is the backbone of the national economy and its traders and retailers play a very big role in the distribution of cement across the country,” he noted.

The association urged the government to intervene to resolve the issue by implementing an imputed tax regime. Otherwise, traders and retailers would have no choice but to close down their businesses. It will lead to increase in unemployment which will eventually affect the business of 50 allied industries and cause huge loss of revenue to the national economy.