April 18, 2007	Wednesday	Rabi-ul-Awwal 29, 1428

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PESHAWAR, April 17: The Sarhad Chamber of Commerce and Industry (SCCI) has urged the federal government to announce a special package in the next budget for industrial development in the NWFP.

SCCI president Liaqat Ahmad Khan and heads of its standing committees on sales tax, customs and income tax said at a press conference here on Tuesday that the demand was part of the chamber’s proposals sent to the government for the federal budget 2007-8.

The proposals range from special concessions for the industrial sector to amendments in the taxation rules and regulations to expand the tax net.

The SCCI also proposed that the tax-to-GDP ratio should be raised from the existing nine per cent to 20 per cent by bringing the agriculture, real estate and services sectors in the net. The SCCI president said the industrialists in the NWFP were bearing a cost difference of 23 per cent over the industries in Sindh and Punjab because of the distance from the port.

The province had also borne the brunt of the decades-long Afghan conflict and the ongoing war on terrorism in the tribal belt, he said.

He said the NWFP had 18 per cent of the small and medium enterprises of the country but almost half of the SMEs were not operating, causing wastage of Rs13.056 billion in investment an a loss of 18,618 jobs.

“This state of affairs is not only affecting the process of industrialisation but also bringing

misery to our labour force,

which is 37.2 per cent of the 17.735 million population of the province.

The unemployment rate in the province’s labour force is 12.9 per cent, which is the highest in the country,” the SCCI chief lamented.

He said a package should be designed to promote the industrial sector in the province, focusing on trade with Afghanistan and beyond.

He said the government should award in the next budget freight subsidy, exemption

from import duties on raw materials and machinery and tax holiday for marble, granite, gemstones, match, furniture, cement, pharmaceuticals, food products and other NWFP-specific industries.

He called for substantial reduction in the cost of doing business by stimulating foreign direct investment in the hydroelectric power generation sector of the NWFP.

The move would ultimately feed the local industry with cheap electricity, he said.

He said that only 1,227 of the 1,964 industrial units in the province were operating, while the remaining 737 had either been closed down or were non-operational.

The total investment in the manufacturing sector was Rs54.4 billion, he said.

He said investment of billions of rupees in the flour mill industry had been lost.

The SCCI president said the special package for the NWFP should include a mandatory credit target for the SME sector because the banks were reluctant to lend to the small entrepreneurs.

He demanded restoration of income tax holiday for Gadoon Industrial Estate for at least six years and cheap electricity for the zone from Tarbela Dam.