LAHORE: Prime Minister Imran Khan’s economic team on Saturday told the business community that the government has no option but to increase the rates of gas and power, as the country is facing a severe economic crisis.The economic team, including Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh, Adviser on Commerce and Trade Abdul Razak Dawood, and State Minister for Revenue Hammad Azhar, held the meeting with the business community representatives at the Governor’s House here. Punjab's Governor Chaudhry Muhammad Sarwar was also present on the occasion. The business community representatives included Lahore Chamber of Commerce and Industry President Almas Hyder and trade leaders Gohar Ejaz, Zubair Tufail, Iftikhar Ali Malik, Dr Salman Shah, Dr Haqan Najeeb, Shahid Hassan Shaikh, Farooq Iftikhar, and Malik Tahir Javed.Dr. Shaikh urged the business community to get ready for more sacrifices instead of seeking relief in taxes and duties, or reduction in gas and power in the forthcoming budget 2019-20, and wait for improvement in the country’s economic situation. Dr Shaikh told the business community in clear words that they should not expect any immediate relief. The meeting was called to discuss the business community’s budget proposals, which ended in complete disappointment among the business community, according to sources. Dr Shaikh stressed the need for promotion of barter trade with an exclusive focus on boosting export of Pakistani products instead of depending on one-way heavy import, devouring the hard-earned foreign exchange. However, he did not offer an enabling environment to the exporters to achieve the daunting task.The business community representatives asked Dr Shaikh how exports could increase when the cost of production is increasing and new taxation measures along with end to zero-rating regime are on the cards. The business community highlighted the issues facing the industry and the prerequisites for boosting exports. However, Dr Shaikh told them that the government has pinned high hopes on them and wanted to deepen harmony with the private sector and take all stakeholders into confidence on important policy decisions. He asked the exporters to prefer barter system being practiced successfully by several countries. He warned that the gas connections of non-filer business people would be cut off. Dr Shaikh told them that their proposals would be considered, as they are the backbone of economy. He said the government is focusing on improving the ease of doing business to facilitate the business community and attract foreign investment. He said the role of business community is highly important for economic stability. He gave a patient hearing to the textile proposals put forth by Gohar Ejaz and assured him of full support to address their issues. He emphasised the need for broadening the tax net and asked people to take full advantage of the amnesty scheme.About the agriculture sector, the adviser said the local hybrid seed should be used instead of the foreign ones, as it suits our land and is in accordance with the taste of people. He said per acre yield could be increased manifold with the application of modern agricultural equipment. He said the government would persuade farmers to bring all arable areas under the plough for boosting agricultural production. Regarding automobile industry, Abdul Hafeez Shaikh said foreign companies are keen to invest in the sector and assured the local industry would also be fully protected. Iftikhar Ali Malik promised full support to the prudent economic policies of Prime Minister Imran Khan. He said the business community would extend a helping hand to the government at this crucial stage provided the local industry also got its due share in the upcoming budget in terms of relief in taxation and a package of incentives to accelerate pace of trade activities in the country.The delegation, led by the LCCI President Almas Hyder, was of view that the industry could not be competitive globally unless it is competitive in its own country. He regretted that the markets are flooded with smuggled, under-invoiced or imitated products. “The industry is uncompetitive because of heavy load of taxes, levis, advance and withholding taxes on raw materials and energy,” he said. The businessmen said refunds are necessary to restore trust in the tax collectors. Income tax and sales tax refunds, for industry, importers and exporters should be paid at the earliest. “We have learnt that the government is planning to introduce a scheme for payment of refunds against the export proceeds (remittances) through the State Bank (Bangladesh model). We are concerned that this system has not been tested. By the time it is tested and implemented, our exports would crash due to lack of liquidity,” they said. They suggested a new refund system made, tested and implemented before zero rating was abolished.They also requested that the refunds through promissory note should also be extended to all sectors including five zero rated sectors, both for sales tax and income tax. They suggested that all raw materials must attract zero or low customs duties. The government must eliminate regulatory duties and additional customs duty on raw materials, so the local industry is able to compete with smuggling, under-invoicing and mitigate the effects of the low tariff FTAs. This will help the government eliminate many SROs and close many doors on corruption, they said. They said the Public Sector Enterprises (PSEs) debt have crossed Rs1,300 billion, and the valuable assets of the PSEs should be liquidated to pay off their debts. They said the size of the federal government needs should be rationalised to reduce the current expenditure, which was around 17% of the GDP.APP adds: Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh said when the PTI came to power, the country’s economic situation was not promising, leaving no option for the government but to take tough decisions such as increase in gas and power tariffs. “The recent programme with the IMF is also one of difficult decisions taken to steer the country out of the economic quagmire,” he said. Dr Shaikh said provision of relief to the common man, resolving the economic crisis, and reducing non-developmental expenditures and improving tax collection are the three major priorities of the upcoming federal budget. The meeting discussed in detail the problems facing the business community as well as ways and means to jack up the country’s exports and overall economy. The businessmen also presented budget proposals about their respective sectors in the meeting.The PM's advisor said after the IMF package, the World Bank and Asian Development Bank would also provide loans to Pakistan at a low mark-up. He said both the banks are expected to give two to three billion US dollars which would further improve economy. He said long-term policies are also being introduced to stabilise Pakistan economically, asserting that today’s difficult time and decisions would bring prosperity for people in future. “Despite all odds, the incumbent government has narrowed down the trade deficit, decreased pressure on foreign exchange reserves, improved governance and initiated Ehsaas Programme to help the poor segments of society,” he said. “A huge grant of Rs216 billion is being earmarked to give subsidy to the electricity consumers, using less than 300 units per month,” he added.Punjab's Governor Chaudhry Muhammad Sarwar assured the business community of fulfilling all promises made with them by the PTI government. He said the government and business community are on the same page with regard to development and progress of the country. He said the PTI is the first government focusing on long-term policies instead of taking short-term policies to provide temporary relief to the masses.Abdul Razak Dawood said investment and trade promotion is the pivot of government’s policies, and the Pak-China Business Forum would not only help enhance trade activities, but also improve linkages between business communities of both the countries. He said the government is taking steps to ensure ease of doing business and in this connection Duty and Tax Remission Scheme system is being simplified further.The Minister of State for Revenue Hammad Azhar said broadening the tax base was need of the hour to tackle the prevailing economic challenges. He asserted that 57 per cent of tax revenue of the federal went to the provinces.
06-02-2019, 08:34 PM
Upping electricity, gas prices compulsion
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