The Karachi Chamber of Commerce and Industry (KCCI) has suggested that 50 percent budget funds should be diverted from Public Sector Development Program (PSDP) to subsidise power, gas and petroleum products, as this would have tremendous impact on the overall economic activities and would stimulate growth.
In its budget proposals sent to the Finance and Commerce Ministers for consideration and including in the 2006-07 federal budget, the chamber suggested that the government should focus more on small and medium enterprises (SME) growth, because enough investment is not coming in new large scale industries.
The chamber has suggested that land utilisation should be ensured through high penalties on non-utilisation of industrial and commercial plots. The chamber suggested that imported and locally manufactured machinery should be zero-rated in the coming budget to boost industrialisation.
The KCCI has proposed that the Government should reduce the number of taxes and place emphasis on general sales tax (GST) and income tax for revenue generation.
The chamber noted that Pakistan's ports are most expensive ports in the region and has proposed that port charges must be substantially reduced to cut cost of raw materials.
The KCCI has suggested that invectives to establish basic industries such as chemicals, pharmaceutical raw materials, petrochemicals, heavy machinery and machine tools to enhance competitiveness.
The chamber has pointed out factors which are making Pakistan's products incompetitive. These include high cost of land, high cost of energy, large number and high rates of taxes, higher port charges and cost of transportation and communications, compared with other regional ports, high cost of raw materials due to lack of basic industries and dependence on import and restrictive business environment due to too many regulating agencies.
The Chamber also pinpointed obstacles which are hampering growth of SMEs sector. These include very high cost of land due to speculative investment and non-utilisation of land, lack of working capital, large number of regulating agencies and large number of taxes, high cost of utilities such as electricity, gas water etc, lack of awareness among the mainstream about the incentives and options available to SMEs
The chamber has suggested that plots for SMEs should be allotted on instalments and concessional prices to boost the SME sector.
The KCCI has also proposed non-utilisation tax - at higher rates - on all industrial plots to stop speculation in land prices.
The chamber proposed outsourcing promotion of SME sector to private sector banks.
The chamber suggested that Small and Medium Enterprises Development Authority (Smeda) be revamped and have nominees from chambers of commerce, trade bodies and banks.
The chamber also pleaded for tax holiday for new SMEs.
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