Call for economic emergency

KARACHI: Federation of Pakistan Chambers of Commerce & Industry (FPCCI) on Monday proposed economic measures to the government, saying the business environment had reached the point of an economic emergency justifiable to put an end to the current economic uncertainty.

In a statement, FPCCI president Irfan Iqbal Sheikh said businesses could not operate profitably under such harsh and unfavourable conditions. He urged the government to bring down the policy rate to 7 percent from its currency level of 12.25 percent to make access to finance affordable and to keep economic activities afloat.

He also asked for substantial efforts to bring down the short-term debt servicing of the government by Rs300 billion, and provide breathing space for better fiscal management. FPCCI chief proposed simplification of personal income tax slabs down to 5-7 from the current 11 slabs. “Interestingly, IMF has also recommended the same and can add up to Rs200 billion to the tax collection in a couple of years.”

Sheikh noted that budgetary deficit was increasing on incessantly loss-making state-owned enterprises (SOEs). It was absolutely imperative to reform and restructure them decisively as their share in budgetary deficit had reached to 23 percent, he added.

He also called for an increase in federal excise duty (FED) on cigarettes and carbonated drinks to serve the dual purpose of generating revenues and protecting the general public in general and the workforce in particular from health hazards.“If FED is raised on cigarettes to 70 percent, Pakistan can generate up to Rs240 billion additional revenues.”

FPCCI expressed his willingness to engage with the government in a consultative process to take on the economic challenges collectively in a broader national interest. He said policies should not be announced in a vacuum without consulting the business, industry and trade community.