Economic reforms package is a half-hearted relief benefitting favourite sectors only

KARACHI: In 2018-2019, Pakistan’s economy is at the cross road of correction or further deterioration. There are very limited choices. There are clear signals from all angles that documentation of economy is inevitable. This step, in the present state of affairs at times, unnerves the business community, in principle, for the reason that administrative actions and powers are at times abused against common businessman.
Nevertheless, there are minimal choices for the government. They have to move towards documentation in a very structured way keeping in view the ground realities and the prevalent culture that has pervaded due to wrong policies of governments in the last forty years. [the_ad id=”31605″] This correction cannot be made in one day. It is therefore advised that a clear road map with transparent and smooth transition be provided for this process.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has termed the ‘economic reform package’ announced by PTI government a half-hearted relief package for the industry, wherein most of the core issued were left untouched.
Addressing a press conference on Thursday President FPCCI Daru Khan Achakzai said the Finance Supplementary 2nd Amendment Bill proposed reduction in gas infrastructure development cess (GIDC) for fertilizer sector, which was a positive step for the agriculture sector, but an injustice to other sectors including textile and cement etc.
“GIDC should be waived off out rightly, as this is an additional and unnecessary burden on the industry,” Daru Khan said.
President FPCCI appreciated issuance of promissory notes against the stuck-up refunds of export oriented industry. However, the criticized that the government would only issue these notes against sales tax refunds of Rs80 billion, while there was no mention of other refunds amounting Rs170 billion. [the_ad id=”31605″] Daru Khan demanded that re-gasified liquid natural gas (RLNG) pricing should be transparent and made public. He also demanded facilities and incentives for industry in least developed areas such as FATA, Chaman and Hub as were given to projects under China-Pakistan Economic Corridor (CPEC).
Senior Vice President FPCCI Mirza Ikhtiar Baig said a total of Rs250 billion worth of refunds were stuck up against sales tax, income tax and export rebate, but the government only talked about issuing 3-year promissory notes against Rs80 billion sales tax refunds.
“These notes can be discounted from banks, but on payment of 10 percent/annum markup. It means if an exporter discounts notes worth Rs10 million, he would only get Rs7.0 million.” Baig termed it a half-hearted relief package, wherein only a handful of sectors were favored.
He appreciated reduced rate of income tax on profits derived from SME, agriculture and low-cost housing financing saying, “It would only be beneficial for these sectors if banks reduce their interest rates for this financing in the same proportionate. Otherwise, it would only benefit banks.”
Baig lauded duty exemption for newsprint, but sharply criticized no relief on import of paper used in printing books. “There are a total of 62 percent taxes on imported paper for printing books, which is highest in the world. Books should not be a source of revenue generation,” Baig said demanding exemption of duty and taxes on paper.
SVP FPCCI criticized that several commitments, which the Finance Minister Asad Umar had made during meetings with business community were not added in the supplementary finance bill.
Advisor to President FPCCI, Mazhar Ali Nasir said many core issued had been left out. “Uninterrupted supply of utilities is the main issue facing industry, which needs immediate redressal.”
Sialkot based industrialist, Nauman Idrees Butt said there was a huge SME sector in Sialkot and most of them were export oriented. He demanded of the government to accord more incentives and exemptions to these employment generation engines. [the_ad id=”31605″]

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