Displaying items by tag: Tax
Nigeria to raise tariff on cement imports
20 March 2013Nigeria: Minister of Trade and Investment, Olusegun Aganga, has announced plans to create a new tariff on imported bulk cement. The move follows the alleged cement 'glut' surrounding a dispute between importer Ibeto Cement and leading producer Dangote Cement in late 2012. The current duty on imported bulk cement is 10% but no levy is imposed on the commodity.
At a meeting on Nigerian business competitiveness organised by the Nigerian Economic Summit Group (NESG), Aganga said that there was no basis for importing cement clinker since Nigeria has a cement production capacity of 28.6Mt/yr. He also stated that at no time did he issue any import permit for bulk cement in 2012.
Producers speak out against Assam clinker tax rise
18 March 2013India: A 4% rise in the entry tax on clinker in the Indian state of Assam has riled local cement producers. In the state budget, chief minister Tarun Gogoi had proposed to raise the entry tax on clinker from 2% to 6%, applicable only to small and medium units.
Industry sources quoted by the Telegraph of India said the proposal to raise the entry tax would adversely affect small grinding units in the state. "Given the budget proposal, there is an apprehension that the small units might not be able to bear the additional cost burden and become unviable," said a source.
The total procurement of clinker from outside Assam is estimated at 1.8Mt/yr, of which 24 small units procure 475,000/t. The source added that these units had invested US$74m in the state, employing over 3000 people directly or indirectly.
However, two large cement manufacturers - Cement Manufacturing Company Ltd (Star Cement, CMAL) and Meghalaya Cement Ltd (Topcem, MCL) - have been exempted from the tax. CMCL and MCL have units at Sonapur and Amingaon in Assam respectively. The source added that these large units had invested up to US$92m in the state, creating jobs for about 600 people.
"The government has accorded mega project status to large cement manufacturers, exempting them from entry tax, but imposed the same on small units. This is contrary to its vision of development," said Dilip Goenka, director of KD Cement.
Egypt considers fees for cement exports
06 March 2013Egypt: Minister of Industry and Foreign Trade Eng. Hatem Saleh has said that the ministry is considering imposing of a levy on cement exports due to 'unjustifiable' increases in cement prices on the local market. In a press statement the Saleh added that cement prices had increased by 66% due to a 'remarkable' deficit in cement quantities.
Saleh pointed out that the 'exaggerated' price rises were 'inconsistent' with the recent increase of energy prices for cement plants imposed by the government. He said that the energy rise only represented up to 18% of the price increase seen. Saleh stressed that the Egyptian government will not ignore any manipulation of prices that add further burdens for consumers.
Indian cement producers demand reduction in excise duty
20 February 2013India: The Indian Cement Manufacturers' Association (CMA) has demanded a reduction in the excise duty for building materials from 12% to 6-8% in the next Indian Union Budget.
"To encourage cement industry and to bring it at par with other core and infrastructure industries, the excise duty rate be rationalised from 12% to 6-8%," said the CMA in a budget memorandum to the Finance Ministry. The CMA added that the excise duty rates on cement are amongst the highest, beaten only by the rates on luxury goods such as cars. It admitted that the Indian industry suffers from an 'excess of surplus capacity'.
"The levies and taxes on cement in India are far higher compared to those in countries of the Asia Pacific Region. Average tax on cement in the Asia Pacific Region is just 11.4%, with the highest levy of 20% being in Sri Lanka," said the CMA. According to the CMA the Indian cement industry had a production capacity of around 340Mt/yr in March 2012.
The CMA also pitched the idea of levying basic customs duty on imports of cement. Alternatively, it suggested that the import duties on goods required for manufacture of cement be abolished.
At present, the import of cement into India is freely allowed without having to pay basic customs duty. However, all the major inputs required for manufacturing cement - such as a limestone, gypsum, petcoke - attract customs duty.
Ohorongo dispute delayed
30 January 2013Namibia: The Namibian attorney general has decided to refer a dispute about the legality of the import duty that is supposed to serve as an infant industry protection measure for cement manufacturer Ohorongo Cement to the Supreme Court. The settlement agreement was reached between lawyers representing Jack's Trading CC, a Chinese-owned cement importer, and the minister of finance and commissioner for customs and excise and was made a court order over objections from senior counsel Raymond Heathcote, representing Ohorongo Cement.
Heathcote tried in vain to persuade the court to first allow Ohorongo Cement to intervene in the latest case between Jack's Trading and the Minister of finance.
In light of the agreement Jack's Trading CC withdrew its latest urgent application in which it was asking the High Court to declare the cement import duty, as decided and announced by the minister of finance, invalid and unlawful and to set the import tax aside.
Liberia drops tax on cement
09 January 2013Liberia: President Ellen Johnson Sirleaf of Liberia has suspended tariffs on cement. The government cited that the move was in the interest of national reconstruction and development.
Under Executive Order No. 46, titled 'Re-Instituting the Suspension of the Protective Tariff on Cement,' the Liberian government has repealed a US$2 protective tariff per 50kg bag of Portland cement imposed under the Revenue Code of Liberia, tariff No. 25.23. The mandate added that the need still exists to encourage local industries to supply cement to the general public at reasonable prices.
Liberia currently has one cement grinding plant, the Liberia Cement Corporation, a subsidiary of HeidelbergCement which employs 63 people. In 2012 Nigerian cement producer Dangote announced plants to build a US$35m plant in the country.
Ash Grove seeks tax break for Midlothian plant
16 May 2012US: Ash Grove Cement is seeking tax abatement for upgrade projects on its Midlothian plant in Texas. Plant manager Kevin Blankenship presented plans to the Ellis County Commissioner's Court on 14 May 2012.
Ash Grove needs to upgrade its plant in line with Environmental Protection Agency (EPA) regulations that will go into effect September 2013. The company is considering two options that will put the plant in compliance with the new regulations. The first option is to upgrade the plant enough so that it will comply with the new emissions standards. The second option is to fully modernise the plant by upgrading to a single dry kiln and shutting the other two existing wet kilns, a project that would cost US$130m. Since the presentation was not an agenda item at the meeting the court took no action.
The Midlothian plant has been in operation since 1966. Ash Grove currently intend to continue running the plant until 2050, but filed a request to shut the wet kilns in April 2012.
Prices set to rise amidst mixed Indian Union Budget
21 March 2012India: The Union Budget for 2012-13 has divided the cement industry on the likely impact of its new measures. An increase in excise and service tax is expected to increase the price for consumers, whilst an expected demand increase for cement will be driven by housing and infrastructure development.
Finance Minister Pranab Mukherjee proposed to exempt imported non-coking coal from the current basic duty of 5%. It is anticipated that this will have a positive impact of 1-1.5% on the industry's operating profit. The cement industry is the third largest consumer of coal after power and metallurgy, requiring about 15-20Mt/yr. At present, the industry meets close to one-fourth of its total coal requirement through imported coal.
Cutting the duty on imported non-coking coal has been offset by an increased excise and service tax of 2%. This hike in excise duty is expected to increase the cost of cement for consumers as manufacturers pass on the impact. One positive feature is the 30% abatement on the retail sale price, a long pending demand of the industry.
Meanwhile on the demand side the measures set to encourage housing and infrastructure development are expected to boost sales.
Overall opinions on the Union Budget have remained neutral for the cement industry, as the increase in excise duty combined with the recent increase in the cost of rail freight will result in a considerable increase in the cost of delivered cement. This will then impact upon the cost of construction. Although welcome the 30% abatement of the retail sale price will also pose some practical difficulties as the sales price changes with different markets.
Cemex starts paying its tax backlog
14 March 2012Mexico: Cemex has paid 20% of the US$361m in taxes it owes the Mexican government, with the rest due in January 2013.
The company said it made a US$72m payment on 1 March 2012. It said it has an option to extend the January 2013 obligation and opt for 36 instalments instead, a move that would cost the company a bit more.
"Cemex thinks it has adequate provisions to meet the (tax) requirement," the company said in a statement.
In 2008 the Supreme Court overturned a ruling that protected Cemex from paying taxes linked to investments in offshore tax havens. The court cited several articles in Mexico's income tax law that required Mexican companies to pay taxes locally on investments in countries where there are no taxes or where levies are 75% lower than in Mexico.