Ways identified to salvage economy, back businesses

ISLAMABAD: The country’s top businessmen on Thursday urged the government to reform Federal Board of Revenue (FBR), implement ease of doing business policies, dismantle illegal import trade through Afghan Transit Trade, mis-declaration, under invoicing and establish compliance.

They presented these recommendations at a meeting of Industrial Advisory Council, organised by Ministries of Commerce and Industries under the chairmanship of caretaker Federal Minister for Commerce and Industries and Production, Gohar Ijaz who sought proposals to increase exports to $100 billion over the next few years.

CEOs Fawad Ahmed Mukhtar, Muhammad Ali Tabba, Waqar Ahmed Malik, Abdul Samad Dawood, Raza Mansha, Shahzad Asghar Ali, Samir Chinoy, Amir Fayyaz Sheikh, Shahbaz Yaseen Malik, Ahsan Bashir, Syed Hyder Ali, and Farooq Naseem shared their views on the current state of affairs and proposed different policy actions to achieve the target.

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Industrialists asked for rationalisation of the taxation system and to simplify and reduce government intervention to improve ease of doing business and incentivise industries, enhance trade and commerce diplomacy, sign Free Trade Agreement (FTA) with USA, and build Pakistan.

Curtailment of government borrowing, enforcement of fiscal discipline and reduction in size of government was also part of their demands.

They also proposed a reduction in line losses of power sector companies and a move towards cost-efficient generation, transmission and distribution. They also asked for presentation of their demands at Special Investment Facilitation Committee (SIFC) forum.

Gohar Ijaz, in his remarks criticised local industry for not delivering despite enjoying substantial benefits in the past. The government gave drawbacks, DLTL, export refinance, incentives to exports related to specific products other than normal products, and bearing the transportation cost to other countries but growth in exports is negligible, he added

“We did everything during the last 15 years. In June 2023, Pakistan’s exports were $ 27.50 billion of which share of textiles was $ 17 billion, non-textile and agriculture exports were just $ 5 billion each, respectively,” he said, adding that Pakistan has reached $ 5 billion level in non-textile export in 76 years, and adding that industrialists are partly ‘typo blame’. He said the government has continuously been extending support to industry since 2005.

“Our mission is to reach the level of $ 100 billion through export-led growth from current $ 30 billion in the next five years. During this period, economy’s size has to be taken to $ 1 trillion from present $ 350 billion,” he continued.

He further argued that industry wants deregulation and a free market economy, adding that it is being suggested that the fertiliser sector should remain regulated or else the farmer will be crushed. Ijaz contended that the fertiliser sector is not benefiting from a subsidy of Rs 5 billion on gas as it goes to provide farmers cheap urea.

He said, gas reserves of Mari Gas, on which the existing fertilisers are operating, will deplete in the next five years, adding that the country has to formulate a long-term policy. He maintained that the profit of fertiliser dealers is higher than Fauji Fertilizer, Fatima Fertilizer and Engro Fertilizer.

Talking about auto sector, he said, Pakistan imported vehicles worth $ 50 billion in 30 years, and $ 10 billion was repatriated to their principals during this period. He said the new auto 2021-26 policy is not succeeding in getting support from the deletion structure.

“We have to give them the next five years’ policy today so that they can prepare themselves for deletion,” he added. He said, Toyota, Honda and Suzuki had to export their variants due to the Auto Policy 2021-26 and when he asked them to honour their commitment they blackmailed him. “The auto policy was approved and when I started implementation on it in 2023, they got angry. We need to sit down and find out the solutions,” he further maintained.

He said the state cannot give subsidy as total tax revenue is projected at Rs 9.4 trillion, which equals interest payment of Rs 9.4 trillion as the stock of deficit that has reached Rs 40 trillion. He asked the Council to provide a solution to the high energy cost.

“Until tax revenue reaches Rs 18 trillion, tax to GDP ratio 17 or 18 per cent, the country cannot function smoothly,” he added. The Council Members have to give solutions, he said. He cited the reference of sugar industry, which is now complaining after the stoppage of sugar smuggling.

Copyright Business Recorder, 2023