Millat Tractors Limited, a major player in Pakistan’s local auto sector, has temporarily ceased production activities at its plant.
Millat Tractors disclosed in a letter to the Pakistan Stock Exchange that significant delays in receiving tax refunds have led to ongoing financial losses for the company.
The recent fiscal policies introduced by the government, including a new budget laden with additional taxes, have placed considerable strain on local industries. Specifically, Millat Tractors is grappling with an imposed 10% sales tax on tractor manufacturing and an alarming 18% general sales tax on tractor parts. The company’s correspondence highlighted the absence of a government-issued mechanism for processing these tax refunds, compounding the financial burden with taxes paid yet not refunded.
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This shutdown casts a shadow over the government’s claims of economic stabilization and raises concerns about the efficacy of its measures to support the industrial sector during economic downturns.
In a related move, the Traders Association of Pakistan and the All Pakistan Traders Association have called for a joint strike on August 28. They criticize the new fiscal year 2024-25 tax regime as unfriendly to traders, particularly condemning the income tax levied based on property values and demanding the removal of all taxes on utility bills.
The associations are also opposing the recent hikes in electricity and gas prices and the imposition of harsh tariffs, which they claim further exacerbate the challenges faced by the business community.
