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Cement Industry plays a vital role in the development of a countrys economy.

Cement industry major role lies in real estate development, projects, industrial expansion, infrastructure development schemes by government or other institutions. For a developing country like Pakistan cement industry has big part in the development of the country. Cement industry employees around 150,000(approx) people directly or indirectly. Cement industry other than itself supports other industries as well i.e. transportation industry also relies on transportation of cement. Pakistan is the 5th largest exporter of cement in the world. The industry runs in a price cartel which has been made a decade ago. Pakistan currently has 29 cement plants which after feeding the domestic demand exports surplus cement to other countries. The industry comprises of 29 firms (19 units in the north and 10 units in the south) with the installed production capacity of 44.09 million tons which compete for the domestic market of over 19 million tons. As a major player in the development of a country this industry is also affected by the regulations of government it may be positive or negative. Taxation is an important source of government revenue, and cement industry involved in business also comes under different taxes. Governments create the rules and frameworks in which businesses are able to compete against each other from time to time the government will change these rules and frameworks forcing businesses to change the way they operate business is thus keenly affected by government policy In Pakistan this industry only has to pay federal taxes it is exempted from provincial taxes. Two taxes are imposed on the cement industry i.e. Federal Sales Tax and Federal Excise Duty. The industry accounts for Rs. 30 billion tax revenue to the country, last four years experienced four billion rupees investment in the development of cement industry and is expanding which will cause tax revenue to increase.

Problem Statement
To determine the effect of taxation on turnover(sales) of cement co's listed on Kse-100 index in case of Pakistan

1. Literature Review
Cement sector in Pakistan have seen many ups and downs is it the boom of the economy and growth of the industry in the Ayub Khan era or the decline it saw because of the nationalization of it in Bhuttos government, or it be the post Bhutto era that saw a rise in the industry in every aspect. The start of the 21st century is considered to be golden age for cement industry in Pakistan it grew rapidly in just a decade 28 million ton of production was added from 2000-2010. The difference of demand in the domestic market and supply was eliminated in 1997. From the creation of Pakistan in which only 4 plants were inherited with a capacity of only 5 lac tones. Pakistan utilizes 70 to 75 % of its production capacity and it stands at almost 44.5 million tones, the global cement market is steadily expanding and it was estimated at 2836 million tons in 2010. Pakistans current demand for cement is 19 million tones. But due to reconstruction works in progress due to different catastrophes that the country saw in recent decade increases the demand by 4 million ton additional. Government policies are of no exemption in playing a role in the cement industry. Taxes are a burden on the cos but revenue for the government and revenues mostly constitute

of these taxes. Tax to gdp ration in Pakistan for the year 2012-2013 is 9.1% i.e. 2381 billion in monetary terms.
The Indian cement industry, particularly cement industry in south India plays a significant role in the countrys economic development which generates substantial revenue for the central and state Government through sales taxes and excise duties.

taxes vary at different situations on this particular sector government for its benefit to re elect itself, to gain popularity etc reduces taxes on cement in pre election years. In this year the government most machinery is used for development of infrastructure so that its popularity can increase. In the last decade the country went through disasters caused by earthquake, floods and heavy rains so to cover up the infrastructure damage huge reconstruction and rehabilitation went through which increased the demand of cement and also drove the government to reduce taxes on cement. As the year of election is advancing i.e. 2013 the present government has also reduced FED on cement Rs. 100 per ton has been reduced bringing it to Rs. 400 from Rs.500 which stands Rs.20 per bag and 16% GST stands there.

Theoretical Framework:

Taxes
(Independent)

Sales Turnover
(dependent)

Proxies
Research Hypothesis
H1: Federal Sales Tax significantly effects turnover of cement companies H2: Federal Excise Duty significantly effects turnover of cement companies

Purpose
To determine the impact of taxation on turnover of cement industry in Pakistan.

Objective
To examine the effect of Federal Sales tax on turnover To examine the effect of Federal Excise Duty on turnover

Significance
The importance of Federal Sales and Excise duty Businesses concerns about the taxes in formulating policies of production and expansion

Scope
Sales and Excise duty have a significant role in growth of cement industry Can be applied to coup with rising sales tax and excise duty

Methodology
Population
Listed cos of cement industry on Kse-100 index

Sample
Attock Cement Lucky Cement Cherat Cement

Data Collection
Secondary Data Annual reports FBR taxes at different point of times in the time period

Data analysis
Regression model would be employed based on (Ali Ibrar 2010) study. Y= + (rstx) + (rfed) +

Limitations

The limitations in the research are it is difficult to calculate the different factors in various time effecting taxes. There had been many natural disasters like flood and heavy rains, terrorist activities etc in the time frame taken for the research.