ST collected from consumers: Businesspeople urged to deposit entire amount in exchequer

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Thursday, urged upon the business community to deposit the whole amount of sales tax, collected from the consumers, in the national exchequer under the National Economic Agenda.

The issue of sales tax was discussed threadbare during the national consultative conference of chambers and associations on a national economic plan for the economic development of Pakistan.

“We all know that the business community is collecting sales tax from the general public but not depositing in the national kitty”, Irfan Iqbal Sheikh ,president FPCCI stated.

During the conference, the FPCCI recommended Assets Declaration Scheme to encash windfall gains in crypto currencies.

The tourism industry and overseas employment bureau can generate additional foreign exchange in dollars provided opportunities are provided to them, relevant associations suggested.

Leading businessman inducted into body on resource mobilisation

The conference recommended that the government should strictly avoid politically motivated expenditures such as untargeted subsidies and discriminatory tax concessions and unjustified appointments. The public expenditure management shall be improved by introducing pension reforms, restructuring/privatising SOEs, minimising subsidies etc. Responsible debt management shall be ensured by a higher weight on long-term debt instruments when inflation is less than eight per cent and vice versa.

The tax management shall be improved by simplifying the tax regime by reducing the number of taxes, broadening the tax base and reducing corporate tax gradually to 25 percent.

According to the presentation shared by the FPCCI during the national consultative conference, during the last 7-8 months Pakistan is facing its worst economic conditions. The foreign reserves are depleting continuously and have dropped to historic lows of approximately US $ 6 billion.

The industries are standing on the edge of collapse. Exports are declining due to the shortage of raw materials. Due to shortage of input materials multinational companies are closing their production plants in Pakistan. The recent examples are two car companies which have shut down their plants causing unemployment in the country. On the other hand, inflation is also out of control.

Due to a trust deficit, Pakistani bonds are unable to attract international markets. The remittances show a declining trend. Pakistan has been declared as the 2nd most expensive country in South Asia. The credit rating agencies have also degraded Pakistan’s status from “Stable” to “Negative” which created further difficulties for Pakistan in order to get new loans.

As an apex trade body of Pakistan, the FPCCI strongly believe that all the affairs of our economy should be managed with consensus decisions with the recommendation of trade bodies as major stakeholders.

The conference obtained feedback on the formation of national agenda with a conscious to pave the way to develop a charter of the economy that will give stability to the economy and might as well give it a great boost.

The FPCCI stated that the governments have not been able to get the country out of the menace of years-old foreign borrowing due to their lack of any clearly defined strategy. The production of our agricultural and industrial sectors has also not been up to the mark due to various masons and questionable strategies adopted by successive governments.

After 70 years we are still confused about whether we should spend on education and health or defence, nationalized economy or a privatized economy, whether direct taxation or indirect taxation, an agricultural economy or industrial economy, should we go for foreign loans or self-reliance, spend more funds for human development or infrastructure development, should we focus on foreign direct investment or local investment.

These can only be sorted out when political and economic leadership sit together with good intent and sincerity for presenting the best economic model and strategy to the nation, to steer the country out of the present economic crisis.

The FPCCI also recommended channelizing modern digital assets such as crypto currency into the national asset base. National Finance Commission (NFC) and Provincial Finance Commission (PFC) Awards shall be announced regularly.

Under the head of Public Finance Management and Monetary Policy, consistency in monetary policy shall be ensured by making interest rate adjustments less frequent. An active and effective Competitive Commission of Pakistan (CCP), effective price control magistracy system and executive vigilance against hoardings and other price manipulation malpractices.

The effectiveness of policy rate adjustment as a tool for containing inflation shall be reviewed; optimise interest rates as debt burden increases due to higher interest rates and access to finance for the private business and SMEs.

For Foreign Exchange Management, the current volatile, speculative and unpredictable exchange rate regime has made trade and investment decisions impossible.

The government shall introduce managed float exchange rate regime while adopting a mechanism for periodic valuation of local currency based on REER. Foreign exchange control measures shall be adopted to restrict the outflow of precious foreign exchange.

Under the National Food Security and Agriculture Sector Sustainability, there is a need for effective Implementation of the National Food Security Policy through effective coordination between provincial and federal authorities.

The essential Food Inventory Management should be done by digitally maintaining food inventory involvement of the domestic private sector developing sufficient storage facilities through active involvement of the private sector and timely interventions in the market.

To increase the Agriculture Sector’s Productivity and Profitability, this should be done by digital integration of the farming community through the use of smart applications which brings awareness about better farming practices.

The horticulture sector will be supported to reach its full potential by access to finance for investment in farm-market-infrastructure, processing and storage facilities, export marketing support by the TDAP and the developing digital platforms. The implementation of the National Water Policy - at provincial levels shall be coordinated by the federal government to bring the country back to a safe water availability level, the FPCCI added.

Copyright Business Recorder, 2023