LAHORE: The apex trade body on Friday showed resentment over a government plan to impose new taxes of Rs170 billion in a bid to meet conditions of the International Monetary Fund (IMF) to revive the bailout programme.
“An already squeezed and pressurised economy will not sustain imposition of Rs170 billion new taxes through a mini budget on the direction of the IMF,” FPCCI president Irfan Iqbal Sheikh said addressing a discussion programme by the Lahore Economic Journalist Association (LEJA).
Instead of imposing the new taxes, the government should plug the loop holes of revenue leakages from electricity, gas and state-owned enterprises and privatise the loss making entities, he suggested.
“The government can save Rs1600 billion by alone controlling the 35 percent electricity theft so such measures will easy out the pressure from the economy,” Sheikh added.
FPCCI chief urged the government not to put any more tax burden on already taxpaying businesses. Further, he asked the center to allow multinational companies to repatriate their due profit to their principals as “for the last 8 to 9 months no company was able to send profit back to its parent.”
“Such acts will shatter investors’ confidence in Pakistan and hurdle the future foreign direct investments into the country.”
Talking about increasing cost of production, Sheikh stated that per unit electricity cost in China and Bangladesh was 7-8 cents only and in Pakistan was 20 cents.
The markup rate in Pakistan is 17 percent, China 2.8 percent, India 6.3 percent, and Bangladesh 5.8 percent.
“With this cost of doing business, how Pakistani products can compete in the world markets,” he questioned.
He also suggested the government to focus on renewable clean energy.
“For this, the government should remove all the duty and taxes on the import of solar panels and equipment to promote solar energy generation in Pakistan.”
Coal power should be generated from local coal produced from Thar Coal instead of expensive imported coal. For that any alteration needed in existing solar plants should be made on priorities, according to FPCCI chief.
He mentioned that most of the stuck containers were not cleared and importers were facing huge demurrages from the shipping lines who are charging up to $120 a container per day.
Sheikh apprised that the apex trade body would present a charter of economy to the government by end of February. “From Monday, FPCCI is starting engagements with all the political parties on charter of economy in order to take their input and bring the political parties on board too.”
The discussion was held at a newly established building of FPCCI regional office in Lahore.
