KARACHI, Feb 10: The provincial government has rejected a proposal by the Federal Minister for Industries, Liaquat Ali Jatoi, to withdraw the 0.5 per cent infrastructure development cess on imports, it is reliably learnt. The proposal was aimed at, what the minister believed, attracting investors to the Export Processing Zone.

Commenting on the minister’s idea, sources in Sindh government pointed out that the provincial exchequer was not strong enough to sustain the loss of Rs2 billion it received annually through the cess. They observed that the government was considering various ways and means to optimize its revenue collection and so as to increase its receivables by 15 per cent to mitigate debts and honour its commitment made to certain donor agencies.

Mr Jatoi had conveyed to the provincial government that the cess was a hurdle in the way of industrial development and, therefore, should be withdrawn. In his communication addressed to the governor and chief minister, he had contended that entrepreneurs of Sindh having a role in the EPZ progress should enjoy the same facilities being extended to their counterparts in other provinces. This, he observed, would help establish a maximum number of industries producing exportable goods. New employment opportunities and more avenues of revenue generation could also be explored this way, he explained.

The minister has already discussed the issue in detail with the Chief Secretary, K. B. Rind, telling him that during his recent visit to Dubai, he had managed to convince some major entrepreneurs to invest in Karachi by setting up industrial units. Mr Jatoi said that they were very much willing but a conducive investment atmosphere had to be offered to them.

According to informed sources, cess was not as such a tax on imports. Rather, they pointed out, it was a sort of maintenance and development charge levied against the use of infrastructure, including roads and bridges, which require frequent and regular repair and upgradation.