Prime Minister’s Move to Abolish Export Surcharge Wins Industry Praise

KARACHI: The SITE Association of Industry (SAI) has praised Prime Minister Shehbaz Sharif’s decision to eliminate the 0.25 percent Export Development Surcharge (EDS), calling it a strategic move expected to strengthen the national export sector. This decision is anticipated to relieve exporters, enhance their global competitiveness, and act as a driver for economic growth. However, SAI emphasized the need for the over Rs50 billion collected under EDS to be used transparently and reinvested in the export sector.

Ahmed Azeem Alvi, President of SAI, highlighted that the prime minister has addressed a long-standing demand of the industrial community by removing the surcharge. He pointed out that the critical issue now is the allocation of the substantial funds accumulated through EDS.

Mr. Alvi stressed that the funds, being sourced from the export sector, should be reinvested back into it to ensure sustainable growth. He urged the government to include business leaders from major contributing cities in the committee overseeing fund usage. This inclusion would ensure that the committee possesses the necessary insight into the sector’s needs, guiding the funds towards sustainable rather than short-term investments.

The SAI president proposed using the EDS funds to revive and upgrade vocational training institutes in Karachi’s industrial zones. Proper planning in this area could potentially generate economic benefits worth up to Rs500 billion, aiding the broader recovery of exports in the future.

Expressing concerns about high input costs, Mr. Alvi noted that exporters are burdened by high electricity, gas, and water tariffs, alongside capacity payments, which he described as an undue penalty on industries. He urged the prime minister to eliminate capacity payments to enable Pakistan’s export industries to compete with countries benefiting from cheaper energy.

Additionally, the SAI chief proposed a reward-based payment system for industries. This system would offer preferential or discounted tariff rates to those who pay their utility bills 10 to 20 days in advance. Such incentives, he stated, would encourage timely payments and enhance industrial competitiveness in international markets.

Mr. Alvi further suggested that alongside affordable energy, the EDS funds should be directed towards training skilled labor and improving industrial work environments. These measures, he said, would significantly boost productivity and strengthen Pakistan’s export capacity at a time when the economy seeks stability.