The All Pakistan Cement Distributors Association (APCDA) has expressed serious concerns over the recent increase in turnover tax on cement distribution, warning that the fivefold rise in taxation could significantly impact the viability of businesses operating within the sector.

According to the association, the turnover tax rate has been increased from 0.25% to 1.25%, substantially raising the tax burden on cement distributors at a time when businesses are already grappling with elevated operating costs and challenging economic conditions.

The concerns were raised during a meeting between an APCDA delegation, led by Chairman Sheikh Abdul Majeed, and the Lahore Chamber of Commerce and Industry (LCCI). The delegation discussed key taxation and financial challenges facing the cement distribution industry, including rising withholding taxes and the broader impact of fiscal measures on business sustainability.

APCDA representatives noted that cement distributors had traditionally operated under a presumptive tax regime, where taxes deducted on commissions were treated as the final discharge of tax liability. However, the replacement of this system with a turnover-based tax framework has significantly increased the sector’s tax obligations.

LCCI President Faheem-ur-Rehman Saigol stated that businesses are already under pressure from high energy costs, elevated financing rates, exchange rate fluctuations, and economic uncertainty. He emphasized that additional taxation is increasing the cost of doing business and adversely affecting the overall investment environment.

Former FPCCI President Mian Anjum Nisar also criticized the sharp increase in turnover tax, describing it as unprecedented and detrimental to business confidence. He stressed that sustainable revenue growth should come through broadening the tax base rather than imposing heavier taxes on already documented sectors.

APCDA Chairman Sheikh Abdul Majeed highlighted that the rising price of cement over the past two years has already increased withholding tax liabilities and other financial obligations for distributors. He warned that the latest tax measures could further strain cash flows and make business operations increasingly difficult.

The association maintained that cement distributors play a vital role in supporting Pakistan’s construction and infrastructure sectors and urged policymakers to review the taxation framework to ensure the continued viability of the industry while supporting economic growth and development.