By Commerce Reporter
LAHORE: Pakistan Sugar Mills Association has said that the Sugar Cane Development Cess has been in effect since 1964 by the Punjab government and this Cess is levied on sugarcane in every crushing season. However, it’s ratio is factored in the cost of production of sugar.
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In a statement, a PSMA spokesman said this tax (cess) on sugarcane supplied to the mills is collected by the government equally from sugar mills and farmers. This tax is used for construction and repair of roads from sugarcane fields to mills, construction of bridges, and research and promotion of the sugarcane crop.
Sugar mills keep receiving complaints from cane growers that this Cess is not only higher than other provinces but also district governments collect the sugarcane cess budget but it is not used for the purposes specified in the law and the condition of farms to mills roads is dilapidated. Pakistan has one of the highest tax rate on sugar in the world. The sales tax alone is 18 percent, while India has 5 percent, Thailand has 7 percent, and China has 13 percent.
The cost of making sugar has already increased significantly. While sugar prices are much lower than its cost and the mills are suffering losses. Their production costs have risen manifold in recent years, due to exorbitant taxation on sugar, expensive imported chemicals, high interest rates, and increases in minimum wages.
In Sindh and Khyber Pakhtunkhwa, the Cess on sugarcane is currently much lower than Punjab. The sugar industry requests the government to reduce the Cess on sugarcane in Punjab from Rs. 5 and bring it at par with other provinces.
