GUJRANWALA, June 20: The vice-chairman of Pakistan Steel Melters Association, Maj Anjum Pervaiz (retired), has expressed concern over the proposed amendment to the Finance Bill 2008 whereby the rate of deduction of tax on electricity bills had been proposed to be enhanced from fixed deduction of Rs2,000 to 10 per cent of the electricity bill exceeding Rs20,000 per month.

In a statement issued here, the vice-chairman said this amendment was proposed to be made part of the Income Tax Ordinance, 2001.

He said steel furnaces were running with electricity only and as a matter of fact electricity was considered to be main raw material in the manufacturing process of steel melting.

For instance, he said, if monthly electricity bill of a steel furnace was Rs5 million, then according to the proposed amendment, a sum of Rs500,000 would be deducted as withholding tax on it and at this ratio, the income tax deducted for the 12 months would amount to Rs6 million.

He said this was a sizeable portion of money which would adversely affect the steel melters. If the National Assembly passed this proposed amendment, he said, it would ruin the business of steel melters during the next fiscal year.

He termed the amendment “a crafty bureaucratic conspiracy” against the elected government because it would compel the owners of steel melting and steel re-rolling units to close down their factories. He said the closure of units would not only result in creating huge unemployment, but it would also deprive the national exchequer of valuable and regular source of revenue deposits and thus affecting the economic growth of the country as a whole.

He urged the parliamentarians to drop this proposed amendment in the larger national interest.