KARACHI: President of Pakistan Businesses Forum (PBF) Mian Usman Zulfiqar has proposed to the economic managers to incentivize investors, broaden tax net through documentation of economy, simplify tax system and take solid step to reform the tax collecting agency.
He expressed serious concern over excessively burdening the manufacturing sector that contributes more than 20 percent to the economy, having a share of 70 percent in tax payments.
He suggested the authorities to rationalize import tariff, which is unlike any other competing country in coming budget for the year 2022-23.
Usman Zulfiqar urged the government to take practical and concrete steps for the implementation of business-friendly policies, saying the sky-rocketing prices of utilities like electricity, gas and petroleum products were slowing down the wheel of economy. He added there was a need to freeze the prices of that inputs for at least three years so that the economy could get required jumpstart.
He also suggested that the sales tax slab should immediately be curtailed in order to reduce cost of production and inflationary pressures. “PBF urge the government to reduce sales tax to single digit and also cut corporate tax to make the upcoming budget business-friendly,” he added. As the lower rate of sales tax will increase revenue and discourage malpractices in input and adjustment. It will give the industry a breathing space against the menace of smuggling.
A significant portion of the total budget should be allocated for Hydro power projects, he stressed. Reliance on costly thermal power has raised the cost of production and the import bill as well. In order 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, he added.
Further in the coming budget speech, government may announce setting up of five mega textiles parks to make the industry globally competitive.
Also, the government makes it compulsory for the large spinning units having more than 30,000 spindles to grow their own cotton to manufacture cotton yarn and extend full support to them because country textile exports could not be enhanced without increasing the area under cotton cultivation and yield.
PBF President further stated that all income earners without exception of any sector should be registered with national tax number. The government should avoid announcing any tax amnesty schemes in the new financial year to encourage the honest taxpayers. He referred to as upon the government to reinstate the single digit rate within the coming budget to encourage business activities within the country. “It suggested fitting of export warehouses at the borders to uplift trade with neighbor countries and transferral the agriculture and service sectors into the tax net”.
Keeping in view of pushing the GDP growth to 6 percent in next 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.
Copyright Business Recorder, 2022
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