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Taxes on steel and construction materials need to be reconsidered

Taxes on steel and construction materials need to be reconsidered

Interview with Mr Ahmed Owais Thanvi — M. D. King’s Group of Builders & Developers

Profile:
M. D. King’s Group of Builders & Developers
Director, ASF Housing Scheme
CEC Member, ABAD
Chairman KMC Committee FPCCI
Convener KMC Committee ABAD
Convener Allied Industries ABAD
Member KCCI

The King’s Group of Builders & Developers is a Construction Company with a nationwide operation in Pakistan since 1977. It provides high quality services to its valued clients across all sectors and has set a strong benchmark for the industry. Based in Karachi, King’s Group provides a comprehensive range of services to a wide range of clients. Kings Group boasts a group of qualified and competent individuals in the following fields to execute projects:

  • Civil Engineering
  • Structural Design Engineers
  • Architects
  • Electrical/Mechanical Engineers
  • Qualified Supervisor/Technicians
  • Skilled Labors

Below are the complete/near completion projects of King’s Group:

  • King’s Residency (Block-13, Gulistan-e-Jauhar)
  • King’s Tower (Block-15, Gulistan-e-Jauhar)
  • King’s Cottages (Block-7, Gulistan-e-Jauhar)
  • King’s Palm Residency (Block-3A, Gulistan-e-Jauhar)
  • King’s Trade Centre (Block-3A, Gulistan-e-Jauhar)
  • King’s Skyline (Block-2, Gulshan-e-Iqbal)
  • King’s Galaxy (Block-2, Gulshan-e-Iqbal)
  • King’s Presidency (Block-3A, Gulistan-e-Jauhar)
  • King’s Garden (Scheme-33)
  • King’s Luxury Apartment (Main Shaheed-e-Millat Road)

PAGE: Your views on the prices of steel, cement and other input in Pakistan compared to other countries:

Ahmed Owais Thanvi: Steel prices are increasing day-by-day. Steel price was 68 to 70 thousand rupees per ton a year ago and after a year, prices skyrocketed. Price of steel is Rs 85 to 90 thousand per ton. The government imposed the duty to protect the steel industry when the commodity prices dipped to US$220 a ton in the international market. However, as a global steel prices have now reached US$480 a ton, the government has not lifted the duty and steel makers are capitalizing on the opportunity. Local steel is selling for Rs 85 to 90 thousand a ton whereas the imported steel is available at Rs 55 to 60 thousand per ton.

 

Cement prices are also on the surge. Currently, the cement prices have reached Rs 530 to 540 per (50 kg) bag. The housing industry is growing in Pakistan especially in Karachi. The existing cement plants are mostly carrying out manufacturing at 85% capacity utilization. Pakistan is a country with a huge scope of cement export. It should be noted that an increase in the export of cement will increase the cement prices in Pakistan.

PAGE: What are your views on taxes imposed on construction sector?

Ahmed Owais Thanvi: The construction sector is providing jobs to millions of people, while more than hundred allied industries are dependent on it, therefore, the taxes on steel, cement, coal and other commodities should be reconsidered. The government increased the federal excise duty on cement and regularity duty on coal in the last two budgets, which is set to damage the construction sector. That decision increased the construction cost and increased in the rent for domestic and commercial property.

PAGE: What are your suggestions and expectations from the upcoming budget?

Ahmed Owais Thanvi: There are lots of expectations from budget 2018-19 and the common man is hoping that the government would provide some relief on personal taxes. As a builder and developer, I personally believe that government will decrease the duties on steel, cement, ceramics and other commodities that will be the big relief for construction industry and this will impact the high prices of the real estate sector.

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