KARACHI: The Pakistan Business Council (PBC) has raised alarms over the recent imposition of export levies by provincial governments, highlighting the detrimental impact on industries already grappling with rising costs. Following the Khyber Pakhtunkhwa government’s introduction of a two percent infrastructure cess last month, the Balochistan government has now imposed an additional levy of up to 1.5 percent on the export value, plus one paisa per kilometer.
This new charge will affect consignments exported through Balochistan to Afghanistan, Central Asia, and neighboring countries such as Iran and Turkiye, according to PBC Chief Executive Ehsan Malik, who communicated these concerns to Federal Commerce Minister Jam Kamal Khan.
Malik emphasized that diversifying markets through regional trade is crucial for Pakistan’s export growth strategy. He pointed out that regional trade can broaden the export basket, as the demands in Central Asia, Afghanistan, and Iran differ significantly from Pakistan’s traditional exports.
Highlighting the competitive disadvantage, Malik warned that Pakistan’s eastern neighbor is swiftly gaining market share in Central Asia and Russia, as well as solidifying trade ties with Iran. “The provincial export levies will undermine the competitiveness of our exports,” he stated.
In his letter, Malik urged Minister Kamal to intervene with the Khyber Pakhtunkhwa and Balochistan governments to repeal the export cess. He also raised concerns about Sindh’s infrastructure cess on imported inputs for export value addition.
He recommended that the federal government engage all provinces through the Council of Common Interests to exempt exports from both direct and indirect provincial taxes. “Exports are vital to the country. All governments need to support this national effort,” Malik asserted.
Meanwhile, Yakoob H. Karim, President of the Hub Chamber of Commerce and Industry (HCCI), has called on the Balochistan government to withdraw its notice regarding the collection of infrastructure cess on all exports. Former HCCI President Ismail Suttar echoed these sentiments, expressing concern over the necessity to boost exports and reduce reliance on imports. He criticized the imposition of additional taxes as contradictory to the goal of enhancing the country’s export capabilities, warning that such measures could discourage existing businesses and deter new investments in the province.
“Exports should not be taxed; they must be incentivized if we are serious about the country’s progress and the prosperity of the people of Pakistan,” Suttar remarked.
