In protest of the increased withholding tax on cement proposed for the 2024–25 federal budget, cement merchants nationwide have begun a statewide strike today. This boosts the withholding tax to 2.5% for non-filers, as Section 236H of the Finance Act 2024 states. Dealers contend that increased taxes on dealers and retailers cannot sustain the cement industry in the present market environment.
Chairman Sajid Chaudhry has expressed serious concerns over these new measures. He pointed out that the increased taxes have driven the price of cement up to Rs. 1,500 per bag, severely disrupting the distribution system. Additionally, he criticized the new requirement for Point of Sale machines, describing it as impractical for many dealers and retailers who need more resources and education to comply.
The cement sellers’ group has demanded that the state intervene to fix these problems. As a possible remedy, they have proposed establishing a presumptive tax regime. If these issues are not resolved, the association says, many companies will have to close their doors, which will increase unemployment and hurt the economy as a whole.
According to the federal budget, cement will also be subject to a higher Federal Excise Duty (FED) in 2024–25. After a steep drop to 2 rupees per kilogram in the prior fiscal year, the new pricing is 4 rupees per kilogram. Finance Minister Muhammad Aurangzeb raised the rate to 4 rupees per kilogram for the next fiscal year, up from 3 rupees per kilogram in the budget. The announcement was made on Friday.
