12 May 2004	Wednesday	21 Rabi-ul-Awwal 1425

ISLAMABAD, May 11: The Federal Minister for Industries and Production, Mr Liaquat Ali Jatoi has criticised the imposition of excise duty on soap and detergents industry and high rate of sales tax, which have rendered these products unaffordable for majority of the people.

Inaugurating a seminar on "Potential of Soap & Detergent Industry" (S&D) organised by the Experts Advisory Cell (EAC) here on Tuesday, he said he would strongly recommend the removal of excise duty and reduction of sales tax.

Attended by representatives of the S&D from all over Pakistan, he said the government realized the importance of interaction with the industry prior to budgetary measures and as such his ministry had set up an advisory committee to obtain the views of the businessmen concerned.

Jatoi acknowledged that under-invoicing and smuggling were major problems facing the indigenous industry. While some elements were out to destroy our industry, the government wanted to protect and help in its growth in order to provide employment.

At the same time, he stressed, the industry should share its prosperity with the consumers in order to improve the poor's life. He referred to the miserable conditions in rural areas.

In his own constituency, the minister said, there was no water supply, no health facilities and no roads. "We need to help those who need," he added.

Earlier, explaining the objectives of the seminar, the Chief of EAC, Engineer Zahid Aziz said, it was part of the Cell's efforts to highlight the potential of each sector and to raise awareness of their entrepreneurs about the WTO regime. Five such seminars had been held to highlight the issues facing various industrial sectors.

While the performance of S&D was quite satisfactory, he remarked, a lot needed to be done. Comprising 110 units in organized and 525 units in unorganized sector, the industry provided direct and indirect employment to over 155,000 people and contributes around Rs16 billion to the exchequer in the form of taxes and duties.

At present, its share in GDP is 0.67pc which, however, can be increased to 1pc very easily, he remarked.

Aziz, however, pointed out that the per capita consumption of soaps and detergents in Pakistan was among the lowest in the world - around 0.5 kg of soap and 0.77 kg of detergents, as compared to 1.5 kg and 2 kg in China and Malaysia.

The people living in rural areas, either have very limited or no access to toilet soaps. Thus the unhygienic conditions inrural areas result of death of 250,000 children every year. Availability of soap at affordable price would encourage the use of soaps and reduce this risk buy 50pc, he said.

Ms Musharraf Hai, the chairman, Unilever Pakistan Limited, later joined by speakers from the industry, emphasised that contrary to the view prevailing in some official circles that soap and detergents were a luxury, these were basic necessities.

Total S&D market in Pakistan in 2003 was 5,95,000 tons including 16pc soap, 27pc detergents and 57pc laundry soap. Of the total soap market, 83pc is documented, while 68pc of the market of detergents is documented.

The industry representatives demanded abolition of excise duty on S&D and reduction in duty on basic soap raw materials. It was also pointed out that excise duty had been imposed only on local manufactures of S&D.

Pakistan was the only country still clinging to excise duty as a source of revenue. It was unwarranted also because at the time of introduction of general sales tax, the government had promised that excise duty would be done away with.

Unless the tax burden was removed, it was emphasised, the industry would not be able to exploit the vast potential of the industry in a country with low consumption. Moreover, it would be increasingly difficult for the industry to survive competition once the WTO rules came fully into operation, they cautioned.

Some of participants from universities also raised the issue of pollution of water caused by the S&D industry. It should earmark a part of its hefty profits for conservation of environment, they stressed.