PESHAWAR: At a time when owners and workers of steel mills in merged tribal districts are holding protests against imposition of Federal Excise Duty (FED) and demanding its withdrawal, the steel mills of rest of the country have urged the government to go ahead with the tax imposition.

The steel mills owners in tribal districts are of the view that imposition of the FED by the government is against the pledge of exempting merged districts from taxes for at least five years following the merger of erstwhile Fata with Khyber Pakhtunkhwa last year.

Now the government is facing extreme pressure from the opposition as well as within its own ranks to withdraw the tax in tribal districts.

In the latest development, The Pakistan Association of Large Steel Producers (PALSP) has written a letter to Prime Minister Imran Khan in which he has been urged to go ahead with imposition of 17 percent FED to ensure an atmosphere of healthy competition. The letter has also been forwarded to the FBR Chairman Shabbar Zaidi.

Although the pressure from steel industry in tribal districts and politicians have not been proved enough to convince the Federal Board of Revenue to withdraw the tax, but the steel mills owners of res of the country fear that the government may finally succumb to political pressure and withdraw the tax. Now conflicting demands from various quarters have put the government into a tight spot.

The PALSP is of the view that exemption of steel industry of tribal districts from taxes will spoil the competitive atmosphere in rest of the country. It said the steel mills will suffer great losses if they continued to pay taxes, while their competitors are exempted. It urged the prime minister to intervene to save the local steel industry from closure. The letter said the steel industry of the country is facing a critical phase as many steel companies are running into losses. The steel mills owners said hundreds of workers have lost their jobs due to closure of industries and the situation will further deteriorate if the issue was not properly addressed.

The letter said relief to industry in tribal districts must not be at the cost of hundreds of other steel units in the rest of the country.