Islamabad: The Pakistan Sugar Mills Association (PSMA) has urged the Punjab government to bring the Sugarcane Development Cess at par with other provinces. The Cess, in effect since 1964, is levied on sugarcane each crushing season and factored into the cost of sugar production.

A PSMA spokesman said the tax is collected equally from sugar mills and farmers, and is meant for construction and repair of roads from sugarcane fields to mills, building bridges, and supporting sugarcane research and promotion. However, complaints from cane growers indicate that the Cess in Punjab is higher than in other provinces and district governments often fail to use the funds for their intended purposes, leaving farm-to-mill roads in poor condition.

The spokesman highlighted that Pakistan has one of the highest sugar taxation rates in the world, with sales tax at 18 percent compared to 5 percent in India, 7 percent in Thailand, and 13 percent in China. Rising production costs-driven by high taxation, expensive imported chemicals, interest rates, and minimum wages-have left sugar mills operating at a loss.

PSMA requested the government to reduce the Punjab Cess from Rs. 5 and align it with the rates in Sindh and Khyber Pakhtunkhwa to support the sustainability of the sugar industry.