Cement dealers launch nationwide strike over tax hike

Cement dealers across Pakistan have initiated an indefinite nationwide strike in response to the increased withholding tax on cement in the federal budget for 2024-25. 

The government raised the withholding tax to 2.5% for non-filers under Section 236H of the Finance Act 2024, complicating the sustainability of the cement business amidst current market conditions and additional turnover taxes imposed on dealers and retailers.

The federal budget for 2024-25 also includes a hike in the Federal Excise Duty (FED) on cement, raising it to Rs4 per kg from Rs2 in the previous fiscal year.

Sajid Chaudhry, Chairman of the All Pakistan Cement Dealers Association, expressed concerns about the adverse impact of these taxes and the requirement for Point of Sale (PoS) machines. He argued that many dealers and retailers lack the necessary resources and education to comply with these demands.

According to media reports, the association has called on the government to consider a presumptive tax regime as a viable solution. They warned that without intervention, many businesses might be forced to shut down, leading to increased unemployment and economic challenges.

Despite these challenges, the export of cement from Pakistan saw a significant increase of 40.46% during the first eleven months of the financial year 2023-24, compared to the same period last year. 

According to the Pakistan Bureau of Statistics (PBS), cement exports reached $236.797 million during July-May 2023-24, up from $168.583 million in the corresponding months of 2022-23.