LAHORE: Advisor to Prime Minister on Finance and Revenue Dr Abdul Hafeez Sheikh said the government is taking steps to put economy on the path to sustainable growth and create employment opportunities for the youth. He predicted that the graph of unemployment will be reduced sharply in coming days.
When it came to power, the government had to face tough challenges of high current account deficit and artificially high exchange rate. These factors were causing de-industrialization, hampering exports and promoting an import-based economy, the Advisor stated while speaking with a delegation of businessmen led by Lahore Chamber of Commerce President Mian Tariq Misbah.
Hafeez Shiekh said the government is focusing on enhancing exports and it is in this context that duties on numerous raw materials have been reduced and energy has been provided at subsidized rates to export sectors.
He said the government is committed to solving the problem of refunds on permanent basis and a lot of improvements have been made in this regard. Through the new refund system (faster plus), the private sector would be able to track the progress on their refunds. If there is a slight delay, the online system would apprise the particular business entity about the reason of delay.
He said the government is also working on reducing expenditures. After many years, the primary deficit has turned into a surplus. The Covid-19 has adversely impacted the tax collection of federal government. Despite financial difficulties, the government facilitated the businesses in Covid-19 scenario by introducing different schemes for deferring principle payments, loans for salaries, relaxation in energy bills for small businesses and tax breaks for the construction sector, adding that Ehsaas Programme has been started to give low cost loans to young entrepreneurs.
He said the government has allowed the import of wheat in order to avoid any scenario of food shortage. A comprehensive package is given to utility stores for essential food items. The SME Policy is being formulated by the ministry of industries. Income tax refunds up to Rs 50 million are being paid, he said, adding the government is ready to bring the other potential sectors like Halal food, pharmaceutical etc in the same facilitation regime as the five other zero-rated export-oriented sectors.
Speaking on the occasion, Governor Punjab Chaudhry Muhammad Sarwar said the government gives extra importance to private sector and is striving hard to keep a close liaison with private sector as they are the main source of wealth creation and employment generation. The present government has worked hard to reduce the current account deficit from US 20 billion dollars to $3 billion. The construction industry has started to pick up due to the recent incentive package by the Prime Minister, he said. The government is committed to reducing the energy cost for private sector by focusing on solar energy.
LCCI President Mian Tariq Misbah said the energy cost for all the export sectors needs to be reduced. The availability of gas for industry should be ensured 24/7. The interest rates should be reduced further in line with the regional economies in which the interest rates are much lower.
He said the FBR has granted 17 percent sales tax exemption and 2 percent withholding tax exemption to foam manufacturers based in Federal/Provincial Administered Tribal Areas (FATA/PATA) on imports of certain raw materials. These materials are imported and sold in other parts of country at cheaper rates. It is seriously hurting the regular foam manufacturers in other parts of the country. He said to flourish the marble sector, the government should declare its status as "industry", adding that the government should announce Lithium-ion Battery Policy and allow duty-free and tax-free import of all type of raw material used in producing Lithium-ion batteries in Pakistan.
The LCCI former presidents said the lithium-ion batteries are very important in the context of new electric vehicle policy. There should be a proper policy on batteries as it is a very large market. They said export processing zones should be established across the country. Testing laboratories should be established to facilitate Halal food and other sectors in getting certifications.
Copyright Business Recorder, 2020
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