Ports remain shut to protest against ‘unjust’ tax

KARACHI: The country’s ports, including seaports, airports, dry ports, bonded Container Freight Stations (CFS) were closed on Tuesday due to the strike by Pakistan International Freight Forwarders Association (Piffa), Air Cargo Agents Association of Pakistan (Acaap), and other stakeholders.
On September 1, members of Piffa, Acaap and other stake holders went on strike nationwide against the eight percent minimum tax on turnover by the government, Piffa Chairman Asim Saeed Khan and Acaap Chairman Farrukh Iqbal said during a press conference on Tuesday.
It was said that their executive committee meetings held on August 20, 2015 and August 24, 2015 respectively decided to go on a general strike. We have closed business from September 1, for an indefinite period due to the eight percent minimum tax on turnover by the government of Pakistan, through the Finance Act, 2015. They have also applied the tax retrospectively from 2009, which the industry is unable to bear and sustain.
It has been decided that we will neither serve nor carry out any commercial activity until the government agrees to revoke the unjust eight percent minimum taxes on turnover on all service providers, Piffa chairman said.
“In a single day $130 million exports have suffered.”
Members of Piffa and Acaap said that freight forwarders and air cargo agents served over 80 percent of Pakistan’s import and export trade. Closure of our businesses would bring the external trade of the country to almost a standstill. This means that importers would not be able to obtain delivery orders nor take deliveries of their cargo from sea ports/airports/bonded CFS. Similarly, exporters would not be able to ship their goods through sea ports/airports/bonded CFS, nor be able to get their bills of ladings for negotiations and proceeds, if the strike continues.
They said that we are aware of the importance of our exports for the country, but it seems our own government does not care.
They said that Piffa, Acaap and their members would not be responsible or liable for any direct or consequential losses suffered by the trade due to their strike.
No bill of lading was issued for export by the freight forwarders or any delivery order for lifting the import consignments at terminals and CFS, also there was no movement of any shipments at the airports. The case was similar at Lahore, Sialkot and Islamabad/Rawalpindi airports and dry ports, said a former chairman Piffa and International Federation of Freight Forwarders Associations (FIATA), while talking to The News.
He said that it is surprising that government imposed an eight percent withholding tax on revenue/turnover, which is non-adjustable. The former chairman said that no business can survive under such a repressive tax regime.
He added that Pakistan’s primary economic project at present was the China-Pakistan Economic Corridor, and the logistics industry would be the primary users and drivers of this important economic corridor. Instead of facilitating and germinating the establishment of a strong logistics industry, this taxation was an attempt to destroy Pakistan’s logistics sector, he said.
Fiata has also taken the issue seriously and has shown its concern on the matter.
The press conference was jointly held by members of Piffa, Acaap, All Pakistan Travel Agent Associations, All Pakistan Manpower Associations, Pakistan Securities Agency Association, and Pakistan Software Exports Association.
The speakers at the press conference said, “We regret the inconvenience caused by the said strike.” They said that during the last two months, several meetings were held, and they made several submissions to the Federal Board of Revenue (FBR), Ministry of Finance, and Prime Ministers’ Secretariat and appealed through the print-media.
The Federation of Pakistan Chambers of Commerce and Industry, Karachi Chamber of Commerce and Industry, Sialkot Chamber of Commerce and Industry, and Lahore Chamber of Commerce and Industry also pleaded on our behalf, they said. However, it is unfortunate that the government is not ready to listen to our grievance, thereby forcing member companies to take the extreme decision of closing businesses, since imposition of this unjust tax means just that, “closure of our businesses".
The former chairman of Piffa and International Federation of Freight Forwarders Associations (FIATA) said that over 700 logistics companies have shut down their operations until resolution of all issues.