KARACHI: Freight forwarders and air cargo agents have gone on an indefinite strike to protest against the eight per cent turnover services tax, bringing cargo handling at all air, sea and dry ports to a standstill across the country.

The strike call was given by Pakistan International Freight Forwarders Association (PIFFA) and Air Cargo Agents Association of Pakistan (ACAAP).

“On the first day of shutdown alone, around $130 million was lost in exports proceeds,” said ACAAP Chairman Farrukh Iqbal while addressing a press conference at the Karachi Press Club on Tuesday along with PIFFA Chairman Asim Saeed Khan.

“We are forced to take an extreme step as meetings with the Federal Board of Revenue’s chairman ended inconclusively,” he said.

Finance Minister Ishaq Dar had earlier admitted that the 8pc minimum tax on turnover was mistakenly imposed and would be withdrawn, Iqbal added.

However, the services industry is still paying 8pc tax against the previous rate of 1pc last fiscal year, he said. “It’s impossible for the services industry having huge turnover but little profit margin to sustain this unjust tax.”

In the past, 1pc minimum tax was adjustable, but after removing clause 79 part IV from Second Schedule of Income Tax Ordinance, 2001 it becomes non-adjustable.

PIFFA Chairman Asim Saeed regretted that such a situation has been created at a time when logistics and supply chain have to play a vital role to cater to the needs of China-Pakistan Economic Corridor (CPEC).

“It is not exports alone which suffered. A huge quantity of perishable commodities and imports were stuck up because freight forwarders and air cargo agents did not issue delivery orders and bill ladings,” he added.

The Customs Freight Stations (CFS) at all the air, sea and dry ports did not receive any cargo for shipments as well as import cargo for clearance which caused serious problem for the industry as well as exporters, he said.

The PIFFA Chairman added that around 500 containers loaded with import cargo, including raw material for industry, are cleared and handled daily by freight forwarders and customs agents. But on Tuesday, not a single import consignment was cleared, he said.

All Pakistan Security Agencies Association and the Travel Agents Association of Pakistan also assured full support to the strike call.

Shabbir Ahmed, the chairman of Pakistan Bedwear Exporters Association, said his exports consignment could not meet the shipping schedule. He feared that his buyers may cancel his order if goods delivery was not made in time because all textiles have to be shipped on a seasonal basis and would go down the drain as no-one could afford to stock them for long.

Fawad Ijaz Khan, the chairman of Pakistan Leather Garments Manufacturers and Exporters Association, said his members kept calling him throughout the day and requested him to help sort out the issue. “It was a desperate day and exporters were running from pillar to post.”

In order to find a way out, he contacted customs official who admitted that no cargo came for clearance and no letters of credit were submitted which means exports and imports were totally paralysed, he added.

Published in Dawn, September 2nd, 2015

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