PBF unveils budget proposals: Govt urged to take steps aimed at boosting business activities

KARACHI: The Pakistan Business Forum (PBF) suggested the government to take effective economic measures in the coming federal budget to encourage business activities in the country with austerity measures in the public sectors.

Sharing the PBF’s proposals for upcoming federal budget 2023-24 with media, PBF President Mian M Usman Zulfiqar stressed the need for establishing export warehouses at the borders to uplift trade with neighboring countries and incorporating the agriculture and service sectors into the tax net.

To increase the GDP growth up to six percent in next financial year, the budget makers have to reduce tax rates to widen the tax base and curtail parallel economy, also providing a competitive edge to Pakistan’s products in global markets.

Muhammad Usman said the PBF was giving its proposals for the federal budget 2023-24 with main focus on jobs creation by strengthening industry, broadening of tax base through lowering rate and introducing liberal policies to attract foreign investment. During the last three decades, he said, it was only thrice when Pakistan’s economy grew by more than 5 percent – first in 2003-2006 and second during 2016-2018 and third during 2021-22.

He said that realizing the full potential of information technology, the industrial production can be increased. He observed that the digital finance potential of Pakistan could be $ 36 billion in next four years, giving a seven percent boost to the GDP and generating four million new jobs.

The PBF president said the real fact is a lack of realisation that the world business patterns have changed and Pakistan has made no efforts to adjust to those realities. If the country wants to have a higher growth rate, it would have to adopt new innovative ways in the post-pandemic world as is being done by other countries, which are expecting a fast V-shaped recovery. “We need to bring our digital infrastructure at par with other fast developing countries, besides adopting new technologies and implementing e-government solutions,” he suggested.

Similarly the PBF has recommended the government to abolish the Super Tax which was imposed on companies earning more than Rs 150 million last year. Cement, steel, sugar, oil and gas, fertilisers, textiles, automobiles, tobacco, and other industries were among them.

The PBF president also urged the general rate of minimum tax u/s 113 of ITO 2001 to be reduced from 1.25 percent to 0.25 percent. “Considering current economic turmoil and inflationary pressure on prices and cost, the minimum tax should be abolished, at least for listed companies,” it added, among other recommendations.

PBF Vice President Jahanara Wattoo expressed serious concern over excessively burdening the manufacturing sector that contributes more than 20 percent to the She suggested the authorities to rationalise import tariff, which was unlike any other competing country.

She urged the government to take practical and concrete steps for the implementation of business-friendly policies, saying that high prices of utilities like electricity, gas and petroleum products were slowing down the wheel of economy. She added there was a need to freeze the prices of those inputs for at least three years so that the economy could get required jumpstart.

She also suggested that the sales tax slab should immediately be curtailed in order to reduce cost of production and inflationary pressures. “The PBF urges the government to reduce sales tax to single digit and also cut corporate tax to make the upcoming budget business-friendly,” she added.

As the lower rate of sales tax will increase revenue and discourage malpractices in input and adjustment.

She said to tackle the energy shortages, maximum funds should be allocated for construction of dams or water reservoirs. The country is in dire need of an urgent shift in its energy-mix in favor of Hydro power and local fuels, she added. On the occasion, PBF Vice President Chaudhry Ahmad Jawad said the slowing down of agriculture sector growth is causing serious repercussions on all aspects of the economy including inflation, poverty, employment, income distribution, current account and food security.

In this regard government must announce tangible steps in the upcoming federal budget including curtailment of fertilizer prices and electricity tariff on tube-wells – aimed at bringing down high prices of agriculture inputs.

Jawad proposed that the government may announce concrete package in the budget for the facilitation of horticulture industry as its global trade crossed $ 250 billion.

He said the government should allocate funds to promote the hybrid seed industry in Pakistan under private-public partnership to increase per acre productivity. “The world is focusing on the use of certified seed for enhancing agriculture productivity due to better profitability and international recognition.”

The government should incentivise businessmen to invest in latest cold storages as it was a vital part of the supply chain for exporting fruits and vegetables as well as for local markets with a tax exception for five years; to chase the target of 900 straight of the art cold storages, he added.

Copyright Business Recorder, 2023