Construction machinery: CAP urges govt to reduce import duty to 2pc

LAHORE: Constructors Association of Pakistan (CAP) has urged the government to curtail import duty on major Off-highway construction machinery and equipment and bring it down to 2%, as allowed to the agriculture sector.

The total duties and taxes on construction machinery range from 31% to 46%, which adds to the already high priced items specially vehicle mounted machinery and excavators, bulldozers etc. It is also pertinent to mention here that Pakistani construction companies cannot afford even second hand equipment and machinery which is being auctioned in UAE, said the letter written to the Federal Bureau of Revenue (FBR) by the CAP Chairman Engr Nasir Kamal.

He said that construction sector plays a major role in the economic development and uplift of a country. It is considered as an important employment generating industry and offering job opportunities to millions of skilled and un-skilled labor force.

Realizing the importance of construction sector and construction activities in the country, the government during the year 1999, declared construction and housing as industry. But, this industry has not been given due status and desired benefits and facilities deserved for an industry in the country, the letter adds.

Nasir Kamal further said that under the above circumstances, Pakistani Construction Industry (specially the SME’s) is unable to mechanize their operation and increase capacity and maintain quality.

This also hinders the adoption of new technology and innovations, thus limiting the local companies to deliver large projects as a result of which, the country becomes dependent on foreign contractors who charge much higher rates.

He said that policy measures should be adopted to enable the local construction companies to import construction equipment and machinery at affordable prices thus enhancing their capacity and eventually saving government expenditure through import substitution of foreign contractors.

To avoid misuse of this facility, the exemption may only be allowed to constructors who hold a valid Contractors License from Pakistan Engineering Council and provides a certificate from Constructors Association of Pakistan confirming the genuine project specific requirements of the constructor keeping in view the works awarded to the company.