Taxes hindering businesses but time not right to bid IMF goodbye: PM

KARACHI: Prime Minister Shehbaz Sharif Wednesday said the current taxation rates were impeding the business and investment activities but it was imperative to honour the commitments made with the IMF, as the country still followed the Fund’s programme.

He expressed these views while addressing a ceremony at the Pakistan Stock Exchange as part of his daylong visit to the port city of Karachi.

The ceremony was held to celebrate the PSX’s recent high performance.

Deputy Prime Minister Muhammad Ishaq Dar, Finance Minister Muhammad Aurangzeb, Federal Information Minister Atta Tarar, governor and chief minister Sindh, Chairperson PSX Dr Shamshad Akhtar and distinguished business and trade personalities attended the event.

“We need to honour the IMF commitments; we can’t say goodbye once we take off. We will say goodbye forever once the time is right,” he said.

Shehbaz said Pakistan’s journey towards economic progress had just begun. Pledging to take the agenda of economic stabilisation and reforms forward, he said vigorous collective efforts had resulted in macro-level stability and now they had to convert it into sustainable economic growth.

He felicitated the PSX for achieving high growth and stressed sustaining the momentum.

“The government’s actual target is economic growth with prudent utilisation of immense natural resources and skills and expertise of experienced business and trade leaders so that we can lead the country to the path of progress and prosperity and prevent the economy from the boom and bust cycles,” said the premier.

He said Karachi was the nerve centre of economy and feedback and suggestions from the city’s investors would prove beneficial for boosting growth.

He said the government would welcome tangible proposals and recommendations from the business community for actualizing an export-led growth.

Regarding the business community’s role, the premier insisted the government and business leaders needed to build a relationship to achieve the set targets.

“The IMF target was 10.6 tax to GDP ratio but we have achieved 10.8. It’s something to celebrate but this is not enough; this is just the beginning.”

The premier insisted that there was a need for investment now recounting that the State Bank of Pakistan’s (SBP) interest rate had been cut from record high of 22 percent to 13pc.

“Investors here say there is still a gap of 8 points. I would want it to go down to 6pc, but it has to be done with an alert mind with prudence so we don’t get trapped in future. We have to move bravely but with caution,” he added.

Shehbaz went on to compare Pakistan with Saudi Arabia in a different context highlighting that the former had mines and minerals while the latter had black gold.

He insisted that the country had to head towards growth saying he knew critics often spoke about the engine heating up and Pakistan heading towards a boom-bust cycle once again when it came to pursuing growth. A lot of experts have spoken and writers have written about it but I invite you to come and tell us what the other way is there.”

On the privatisation issue, the premier said the process was entirely transparent citing the example of Pakistan International Airlines (PIA) which the government failed to privatise in the first attempt.

“The entire process was 100pc transparent just like the Islamabad International Airport whose privatisation process is about to conclude in the next few days,” he said. Deputy Prime Minister Senator Mohammad Ishaq Dar reflected on the long-term benefits of stock market integration which began nine years ago noting that the markets had grown into a strong foundation for the economy.

He acknowledged the struggles faced in 2017 due to the political instability and economic downturn that followed.

Dar also highlighted the threat of economic collapse that the countries faced globally during the Covid-19 pandemic.

He urged the business leaders not to despair, assuring them that the future looked bright.

He credited PM Shehbaz with preventing the country from economic collapse and acknowledged that Pakistan’s diplomatic isolation had ended with the increasing foreign investor confidence.

Finance Minister Muhammad Aurangzeb underscored the importance of stock market in boosting the investor confidence in the economy.

He highlighted the progress made through the IMF agreement which provided economic stability. He noted that the reforms were underway in the struggling public sector institutions.

The finance minister noted that a reduction in the policy rate had eased the burden of debt and interest payments.

Meanwhile, addressing the inaugural ceremony of the Faceless Customs Assessment System (Central Appraising Unit), at South Asia Terminals Pakistan (SAPT), Shehbaz said Pakistan had attained favourable macroeconomic indicators and now it was incumbent upon the state functionaries, investors, exporters, and all stakeholders to collaborate synergistically for further strengthening the economy.

He said the government would execute a comprehensive integration of the entire economy through an e-governance system.

He said macroeconomic indicators like exports, which increased by 11 percent and IT exports which registered a 34 percent increase, were all positive. He congratulated the finance minister, FBR, Karachi Port and the customs department on the successful launch of the Faceless Customs Assessment System.

He also lauded the young officers of Customs Department and said they were serving Pakistan and it was after 77 years that these officers had achieved the accomplishment that the nation expected and whose occurrence was an inevitable process for the economic development and prosperity of the country.

He said with the launch of the project, now the goods declarations time of a consignment was 10 minutes and if more than one item was part of the consignment, it might take 15 to 20 minutes. He said it was very gratifying that in just three weeks, the Bill Of Entry (BOE) time had been reduced from 42 hours to 19 hours during the experimental phase of the project.

The average BOE time of 19 hours is a great achievement and it is hoped that the target of 12 hours average time, as per target assigned by him, would also be achieved with further improvement.

He suggested that Sindh Chief Minister Sindh Murad Ali Shah and Governor Kamran Khan Tessori conduct a third-party evaluation of the project through the IT experts.

He said in the last nine months, the focus on the FBR reforms was yielding good results.

“We also have to reduce the electricity prices and will also talk to the provinces in this regard so that the provinces are also given responsibility,” he said.

He said as long as the price of electricity per unit did not come down to Rs15 to 20 per unit, agriculture and exports could not develop.

Meanwhile, addressing the launching ceremony of AKU Manual of Clinical Practice Guidelines AKU Auditorium, Shehbaz said the government was committed to ensuring optimum healthcare facilities to the people, as these were the foundations of a thriving society and hallmark of clinical excellence, professionalism and ethics.

He said the launch of AKU Manual of Clinical Practice Guidelines was a landmark achievement that reflected the institution’s resolve to elevate the standards of healthcare.

Shehbaz also commended the legacy of Aga Khan family towards supporting the initiatives for the social and economic uplift of our country. He expressed optimism that the university would continue to work closely with the government institutions and professional organizations to ensure that such practice guidelines were widely distributed and readily accessible.

Shehbaz said the country’s healthcare system was unfortunately riddled with many hurdles and challenges, such as limited access to quality care in rural areas, shortages of skilled professionals, and the dual burden of communicable and non-communicable diseases.

He also congratulated the authors, researchers and contributors of the manual and said the AKU team’s hard work and dedication to improving clinical practices will have a lasting impact on Pakistan’s healthcare system.