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High raw materials tax hits Kandahar industry output

High raw materials tax hits Kandahar industry output

KANDAHAR: Traders and industrialists in southern Kandahar province say they are struggling with numerous problems and the government instead of facilitating them is adding to their miseries.

They say the government has increased tax on around 800 types of raw materials from 15 percent to 20 percent, resulting in increased prices of domestic products.

Haji Nasratullah Zahir, head of Kandahar chamber of commerce and industries, told Pajhwok Afghan News that President Ashraf Ghani had promised a cut in taxes on raw materials imported to the country, but the promise was yet to be fulfilled.

He said 15 to 20 percent increase in taxes on raw material imports had affected local productions.

“In the past, traders would pay five percent tax on raw materials imported to the country but now they pay 17 percent and 20 percent tax on about 800 types of raw materials used in local factories for different products,” he said.

Haji Nasratullah Zahir criticized the government and said it was creating problems for traders instead of providing them with facilities.

Imports of goods which are locally produced is another major problem, affecting the market of domestic products, he said.

Citing an example, the trade said PVC pipes were produced in the country but they were also imported from Iran.

Zahir said it was government’s responsibility to provide facilities for industrialists and prevent imports of goods produced inside the country.

He also complained about problems in imports of agricultural products and fruits and said in the past importing a tractor from Iran would cost 800,000 afghanis but now it cost 1,300,000 afghanis.

“I wanted to export 20 tons of pomegranates to Germany through Islam Qala port, but bureaucracy in the government delayed the exportation for 14 days and the fruits rotted,” he said.

He said the industry and agricultural areas could not improve until the government provided needed facilities to investors.

The revenue could be increased by boosting businesses not by increasing taxes, Zahir said, adding that high taxes forced traders to import goods only once a year.

Haji Rahmuddin Agha, head of Entrepreneurs Association in Kandahar, also said besides other problems, there were no facilities for industrialists in the provincial industrial park.

He said many factories in Kandahar were closed due to lack of electricity and the government’s inability to provide them essential facilities such as asphalted road, water system, healthcare center and firefighting service at the industrial park.

Faizulhaq Mushkani, deputy head of Kandahar Industrialists Association, also mentioned the same problems.

He said 154 factories were semi-functional and 135 others had to be completely shut down for lack of electricity during the past several years.

He added many investors were waiting for the solar energy plant to be activated. Mushkani said there were more than 200 factories in Kandahar producing cotton, oil, cotton cake, soap, ice, packages, PVC pipes, food items, non-alcoholic drinks and others and around 5,000 people worked there.