ISLAMABAD: Pakistan Association of Large Steel Producers (PALSP) has asked the government to make the steel industry critical enabler of growth amid infrastructure development, China-Pakistan Economic Corridor projects and large-scale housing programmes in the country.

In its budget proposals forwarded to the Ministry of Industries and Production, steel producers highlighted that Pakistan has a menial steel consumption of 42 kg per capita compared to the world average of 256 kg per capita.

“Pakistan has a long way to go in terms of steel manufacturing and consumption in order to become a developed economy,” PALSP noted adding that the long-term vision for the steel industry is to enhance its global competitiveness so that Pakistan can become a steel exporting nation.

However, to achieve this objective, the government will have to provide policy frame-work to address key cost parameters and policy uncertainties so that investments can materialise to build economies of scale.

The PALSP has claimed that they represent large-scale, documented, and integrated steel producers that manufacture over two million tonnes of steel per annum, and contribute highest revenue to the national exchequer within the long steel sector.

The domestic industry plays a critical role in the economy, supplying raw material to the construction, engineering, and auto and defence sectors.

The steel producers have asked the government that there was a need to curb smuggling and prevent massive tax evasion.

Moreover, the steel imports should be banned through land routes.

They said that currently, large consignments of smuggled steel bars mainly from Iran border are making their way in to the Pakistani markets undercutting the local industry.

Steel imports items should be allowed only from the sea route as it will allow customs to control and regulate smuggling activities, PALSP suggested.

The association said that in order to curb sales tax evasion by melting units operating on electricity provided by power generating companies other than power distributing companies, the tax should be increased to Rs7,300 per metric tonne at the import stage and the same should be made un-adjustable against the sales tax collected on the basis of units of electricity consumed.

The PALSP has also mentioned that in order for long steel producers operating under Sales Tax Special Procedures to explore the export market, a mechanism must be developed where companies can retrieve the sales tax paid on import stage and electricity bill in a reasonable time frame.

Published in Dawn, May 12th, 2019