Saturday June 15, 2024

SAI demands fiscal overhaul

By Our Correspondent
May 18, 2024
Labourers work at a construction site. — AFP/File
Labourers work at a construction site. — AFP/File

KARACHI: The SITE Association of Industry (SAI) has proposed to the government an increase in the tax-to-GDP ratio by bringing the untaxed and undertaxed sectors of the economy into the tax net.

“Overburdening the crucial industrial sector runs counter to Pakistan's economic development goals,” the SAI’s budget proposal stated. It *has recommended that the government should encompass four areas of policymaking: fiscal, monetary, trade, and energy policies.

SAI’s demands include a substantial reduction in direct and indirect taxation measures on industries, a reduction in corporate taxation, dividends, and taxes on salaried persons, the removal of unnecessary restrictions on the import of industrial inputs, the implementation of a single cascaded rate of import tariffs on industrial inputs, and the removal of additional and regulatory duties.

It also calls for the provision of a predictable forex regime with a 12-month forex cover for imports and exports, and a revision of energy policies to reduce electricity and gas tariffs for industries.Additionally, a progressive reduction of policy rates to stimulate industrial and economic growth, and the lowering of lending rates for industrial projects and exports to a single digit are proposed.