The government is already doing well for economic revival of the country and if it makes joint proposals of the business community a part of its upcoming budget document, the country would definitely gain the momentum of growth.
While addressing a convention of top business leaders of the country, the LCCI President Almas Hyder said that being a stakeholder, business community of the country has deep sight and realization about the trade and economic issues and their solution. He said that the Lahore Chamber of Commerce & Industry has planned to give a set of joint proposals to the government for the budget document.
Almas Hyder said that energy prices must be uniform in all provinces including electricity and gas as these are basic raw materials for the industry and any fluctuation in their prices directly affects the cost of doing business. He said that all Raw Materials must attract zero or low custom duties. Government must eliminate Regulatory Duties (RD) and Additional Custom Duty (AD) on Raw materials, so that local industry is able to compete with smuggling and mitigate the effect of low tariff FTAs. He said that rate of duties for trade and industry must be same, so that SMEs who procure from Trade should have a level playing field.
The LCCI President said that Custom Duties (CD) on intermediary products be reduced so that our industry is able to import quality materials, components and machinery from the rest of the world at the same duty rate at which it imported through different FTAs.
He said that nonpayment of Refunds is drying out liquidity from the markets. Payment through promissory notes should also be extended to all sectors including five zero rated sectors. Refunds be issued automatically without application, or pre-audit, within 60 days as per rules.
Almas Hyder suggested reduction in interest rates since high rates have made borrowing expensive for private sector and discouraged investment. There should be a window of low interest rates for SMEs as these are backbone of the manufacturing sector.
The LCCI chief said that the exemption from the payment of Sales Tax on imported plant and machinery for Greenfield projects should also be granted to brownfield projects and BMRE. Special tax facilitation is needed for sick units, for which rules should be framed. He said that the Provincial Governments should Re-zone areas in and around urban centres, both for industrial and commercial use to help entrepreneurs invest in green field and other projects. The Government should demarcate industrial and economic zones and set up SEZs urgently.
He said that land provided to foreign investors should be offered on 50 year lease only. For Pakistani investors, option should be available for freehold and leasehold properties.
Almas Hyder said that foreign investment should only be allowed as a JV with Pakistani investors or as a public listed company so that local investors also benefit. All existing industrial units should be regularized without penalty. He said that warehousing of raw materials should be allowed in EPZs and SEZs. Company Office should be formed for registration of new companies. Registering a company should be separated from regulating a company. Regulation should start once the company gets operational.
He said that there should be One Tax Collection Authority for the collection of both Federal and Provincial Taxes. The total number of taxes should be reduced to 5 by clubbing Labour related taxes e.g. EOBI, PESSI, WPPF, WWF, Professional and Property Tax, Federal and Provincial Sales Tax.
“The frequency of Tax Payments should be reduced by reducing the frequency of the Tax Payments of EOBI, PESSI and Sales Tax. Steps must be taken to separate tax collection, from service provision, so that departments like PESSI, EOBI etc. stop sending inspectors for tax collection and provide government services like hospitals, pensions etc only.