Timber merchants complain of exorbitant duty, taxes

KARACHI: A four-member delegation of Karachi Timber Merchant Group Monday apprised the Chairman Standing Committee on Finance and Revenue & Economic Affairs Qaiser Ahmed Sheikh that an exorbitant duty on wood and its items like Medium Density Fiber (MDF) Board is being imposed .

The delegation comprising on Honorary General Secretary, Mukhtar Hussain Dossani, Vice-President Zahid Hussain Piprani,  Senior Member  Saeed A Basathia & Managing Committee members Mushtaq Vali Mohammed, who attended the 71st meeting of the Standing Committee on Finance Revenue & Economic Affairs in Committee Room No 7, 4th Floor Parliament House Islamabad.

The members of the delegation explained the committee about the duty structure on MDF and demanded the government to reduce the duty on MDF Board as it is semi- finished product and a raw material for many industries. They also demanded to eliminate custom duty on wood and timber to safeguard meagre forest resources.

The importers of MDF asked the committee to further reduce the duties from 17 per cent to 5 per cent to protect commercial importers who are selling this imported product to small workshops, carpenters, joineries, and the value-addition industry of Pakistan.

This Raw MDF is being imported from Malaysia, Thailand, and Indonesia to meet the local demand, but they have to pay an accumulated tax of about 55 per cent which includes customs duties and other taxes.

While the same MDF is being imported from Sri Lanka at 0 per cent duty so the accumulated expenses are 35 per cent in shape of sales tax and withholding taxes under the Free Trade Agreement (FTA).  The huge gap of 20% in customs duty is inequality, unfair and unjust.

They further claimed that the manufacturers of MDF from Khyber Pakhtoonkhwa (KPK) are also lobbying to enhance the duties in the federal budget for past two to three years.

The importers of MDF other than Sri Lanka are paying duties up to 20 per cent higher and the importers are not happy with these additional taxes which they find discriminatory.

They further highlight that there are a number of value-addition industries in Pakistan and they use Raw MDF as their raw material, any issues in the imports of MDF could result in massive unemployment in this sector, which would be harmful to multiple industries.

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