FPCCI Demands Clarification in Infrastructure Cess Atif Ikram Sheikh, President FPCCI

Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has strongly sought the clarification on infrastructure
development cess (IDC) on imports in Sindh as it has been even further increased from 1.25% to 1.80% -
1.85%. It is pertinent to note that Mr. Mukesh Kumar Chawla, Provincial Minister of Excise, Taxation and
Narcotics, Government of Sindh, visited FPCCI Head Office at Federation House, Karachi, on
Wednesday for a detailed, interactive and consultative session on the longstanding issue

Mr. Atif Ikram Sheikh explained that the business community in Sindh is primarily concerned about the
financial strain, legal validity and lack of visible infrastructure improvements despite the substantial
revenue generated from the cess. While the Sindh government defends the cess as essential for
infrastructure maintenance, the ongoing legal battles and perceived mismanagement of funds continue to
fuel tensions.

Mr. Mukesh Kumar Chawla offered the session that provided the businesses and companies can all
collectively withdraw all court cases vis-à-vis infrastructure development cess, the Sindh Government is
ready to lower the cess to 1.0% from the current 1.85% – and, keep it at that level for the next 3 years. He
also agreed to consider withdrawing cess on solar panels.

On the issues of delay in the issuance of number plates, the Sindh provincial minister informed that
200,000 number plates will be delivered within a week; and, additionally, the government is planning to
have the number plates generating plant installed at the civic center, Karachi, in order to fully resolve the
issue.

Mr. Saquib Fayyaz Magoon, SVP FPCCI, apprised that the recent efforts to resolve the cess issue through
dialogue and collaboration indicate a potential path forward; but, the business community remains
cautious – seeking tangible outcomes and greater transparency. He mentioned that cess on solar panels
should be withdrawn.

Mr. Saquib Fayyaz Magoon added that FPCCI, being the apex body, is receiving feedback from all
chambers, associations and trade bodies from various sectors to advocate reversal of these
counterproductive measures, he added.

Mr. Abdul Mohamin Khan, VP & Regional Chairman Sindh, FPCCI, elaborated that international export
markets are very competitive; and, any addition in cost of production through duties, taxes or cess on
temporary imports; i.e. raw materials used for export-oriented production have direct detrimental effects
on fulfillment of export orders in a profitable, timely and competitive manner

Mr. Abdul Mohamin Khan proposed that the imports falling under Export Facilitation Scheme (EFS)
should be exempt from IDC as these are essentially aimed for industrial production meant for exports –
and, the imposition of the cess on those imports makes no economic sense and it undermines the very
spirit of EFS.