Why taxes on trucks should be reviewed

Dubai - Government should look into it in order to attract more investment in manufacturing sector

Individual emirates in the UAE have imposed toll taxes on trucks over the last few months and the federal government should look into as it could hamper the industry and investment into the country, an industry executive from the cement manufacturing industry urged.
"In the last couple of months, individual emirates have started toll charges for entry and exist of trucks. Emirates like Fujairah and Ras Al Khaimah have a toll of Dh300 for any truck moving out of the emirate. Similarly, Sharjah followed and started charging Dh420 for an entry of trucks in the emirate," said Pramod Rajgaria, chief executive officer of Star Cement.
He disclosed that some other emirates could also levy toll tax on trucks, which will send the wrong signal to investment community. Authorities had previously levied a Dh100 toll on trucks entering Sharjah.
"We are very apprehensive. this is something government should think about it," Rajgaria told Khaleej Times on the sidelines of an event hosted by the Accounting, Audit & Advisory Services Focus Group, a unit of the Indian Business and Professional Council (IBPC) - Dubai.
Nimish Makvana, president, IBPC; Sanjeev Agarwala, chief operating officer, Al Hatboor Hospitality and Investment; and Anurag Chaturvedi, managing partner, Chartered House Tax Consultancy; also addressed the panel discussion during the event, which was moderated by Naveen Sharma, head of AAA Focus Group IBPC Dubai.
Rajgaria says the UAE recently reduced electricity charges for the manufacturing industry to 45 fils but he sees the need for further reduction in order to give depth to the economy.
"The UAE reduced electricity charges some six months back and it was a welcome move. Having so much of energy in terms of oil and gas, power cost in the UAE is 45 fils. In India, which is an energy-hungry country and importing all of its energy from the Middle East, the power cost there is 30 fils. So, how the industry will come and invest here because power is an important element in manufacturing sector. If you want depth in the economy, you have to do those things."
He advised that the government should look into it in order to attract more investment in manufacturing sector. Rajgaria said last two years have been very challenge for the cement industry as housing industry is performing well.
"As of now, we don't expect much, so 2019 will be a challenging year. There is a liquidity issue in the system and demand is also low. We hope things will improve as Abu Dhabi has announced a Dh50 billion stimulus packages and funding few projects. So they'll compensate the downfall in housing demand," he added.
Due to low demand, Star Cement will look for inorganic growth through acquisitions.
"We are open for inorganic growth like acquisition of existing assets. We have recently acquired Binani Cement which has a unit in Jebel Ali and assets in China and India," Rajgaria said.
- waheedabbas@khaleejtimes.com