Heavy taxation suppresses Pakistan's cement sales in August

Pakistan’s cement sales declined significantly in August after manufacturers hiked prices due to heavy taxation, which resulted in reduced demand.

The industry’s sales were down 25.68% to 3.36 million tons in August compared to 4.528 million tons dispatched in the same month last year.

According to data released by the All Pakistan Cement Manufacturers Association, local cement dispatches in August were 2.752 million tons, down 27.54% compared to 3.798 million tons in August 2023. Exports also declined by 16% as volumes reduced from 730,755 tons in August 2023 to 613,857 tons this year.

During the first two months of current fiscal year, total cement sales (domestic and exports) were 6.375 million tons, 17.82% lower than 7.758 million tons dispatched during the corresponding period of last year. Domestic dispatches during this period were 5.214 million, down 20.73%. Meanwhile, exports were down 1.65% to 1.161 million tons.

A spokesman of the All Pakistan Cement Manufacturers Association said the industry was struggling to cope with higher taxes and economic uncertainty. Heavy monsoon also impacted construction activities during last month, he observed.

The spokesman pointed out that excise duty had been doubled on cement in the federal budget along with increase in other federal and provincial taxes.

“No other businesses have been taxed in such an enormous proportion. The government must review the taxation measures as the construction sector is suffering due to continuous decline in domestic offtake, which, in turn, is hurting employment opportunities,” he said.