Sindh cuts infrastructure cess to ease business costs, ends long-standing demand

In a significant move to reduce the cost of doing business, the Sindh government has decided to slash the infrastructure development cess (IDC) to 0.80-0.85%, down from the previous rate of 1.85%. This decision addresses a long-standing demand from the business community, which has been seeking relief for nearly two decades.

At a press conference on Monday, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh hailed the move as a "historic breakthrough," stressing that it would significantly alleviate business costs. He further pointed out that the infrastructure cess on the Export Facilitation Scheme (EFS) had been completely abolished, fulfilling a crucial demand from exporters.

FPCCI Senior Vice-President Saquib Fayyaz Magoon mentioned that around Rs350 billion tied to the Sindh IDC is currently embroiled in litigation. 

Under the new plan, traders who withdraw their cases will be offered a structured payment schedule. The settlement requires 15% of the outstanding amount to be paid by July 31, another 15% by October 31, and the remaining balance to be paid in installments through July 2027.

Magoon highlighted that the reduction in the cess would ease liquidity pressures, particularly for importers, by lowering overall business costs.

FPCCI Vice-President and Regional Chairman for Sindh, Abdul Mohamin Khan, noted that after the initial 45% payment, the remaining 55% would be paid over 12 years, from 2028 to 2040. This arrangement would not only reduce financial burdens but also expedite port clearance processes.

Asif Sakhi, another FPCCI Vice-President, explained that traders involved in ongoing court cases who opt for the settlement would be subject to the new cess rate of 0.85%, while those without pending litigation would be charged 0.80%.