Ministers to discuss trade issues with KCCI: PM to announce relief package on May 1

KARACHI: Prime Minister Shehbaz Sharif, after listening to the grievances highlighted by the Karachi Chamber, immediately directed all the relevant federal ministers and secretaries to hold meeting with KCCI so that the issues being faced by business community could be extensively discussed to agree upon solutions whereas he himself would personally review the outcome of discussions and, accordingly, announce relief on 1st May.

Speaking at a meeting held at CM House on Wednesday with a delegation of Karachi Chamber of Commerce & Industry which was led by Chairman Businessmen Group Zubair Motiwala and KCCI President Iftikhar Ahmed Sheikh, the Prime Minister, while thanking the Karachi Chamber for apprising him about numerous issues hindering growth, economy and production, asked Federal Minister for Planning & Development Ahsan Iqbal to coordinate the meetings with ministers and secretaries so that immediate relief could be provided to perturbed business community of Karachi.

“You can also bring any other problem to my notice whenever it emerges as it is my responsibility to provide maximum relief and an enabling business environment to business community,” he added.

He directed the Federal Board of Revenue to defer the controversial SRO350, besides advising release of all the pending payments against Customs Rebate, Sales Tax and Income Tax Refunds, Duty Drawback of Local Taxes & Levies (DLTL), etc.

Prime Minister Shehbaz Sharif, in response to deep concerns expressed by Chairman BMG Zubair Motiwala over unbearable gas and electricity tariff, took serious notice of the hardships being suffered by business community due to exorbitantly high gas and electricity tariffs and assured to give due consideration to KCCI’s suggestions for bringing down the energy tariffs at par with regional competing countries.

The dream to enhance exports would never become reality if the gas and electricity tariffs remain high as compared to regional countries, he said, adding that industry has to be strengthened to expand the exports, hence, the Energy Minister should devise some kind of an effective strategy to resolve the grievances being faced by business community.

BMG, KCCI urge Shehbaz to restart negotiations

Commenting on concerns expressed over severe water shortages being faced by Karachi, he said that the funds for desperately needed K-IV project, which have been pending since long, will be released as per commitment.

He also asked the business community to join hands with the government and make collective efforts to pull the economy out of crises.

In response to concerns expressed over high interest rates, Shehbaz Sharif said, “We are under IMF program and in a very difficult situation.”

He, however, asked the finance minister to start work on how to reduce the interest rate as the inflation has eased.

BMG Chairman Zubair Motiwala in his presentation, stated that although the Prime Minister was keen to double the exports and support the industry in terms of reducing cost of doing business but under the prevailing circumstances, it looks impossible and we fear our competitors will capture Pakistan’s orders as due to low cost of doing business in terms of cost of gas and electricity.

“It is surprising that we want to enhance the exports and expand local manufacturing but we are enhancing the price by adding cross-subsidies paid to other sectors which takes this gas tariff from Rs1,466 to Rs2,600 for industrial heating and Rs3100 for captive power,” he added.

He noted that six months ago, gas tariff stood at Rs1,150 and Rs1350 which has risen by three times within six months. “Can any business survive with this kind of increase under the prevalent circumstances in the international market”, he asked, adding that the industry was ready to pay full 100 percent cost of gas without any subsidy. “We don’t want any subsidy.

We do not wish to be involved in subsidizing any other sector. We simply want to have the industry charged the actual cost of gas without subsidizing other sectors.“ He further suggested that the govt should consider introducing wheeling charges to supply imported LNG to industries via SSGCL pipelines which would stabilize the tariff and calculation for tariff based on international prices, especially for export sectors.

Commenting on electricity issues, Zubair Motiwala said that Pakistan was burdened with the capacity charges due to idle capacity, resulting in a situation where surplus electricity, was neither sold nor offered at reduced rates to the industry.

“This idle capacity exacerbates the circular debt issue in power sector. Hence, it is imperative to introduce a scheme aimed at reducing levelized tariff for industrial sector, which would increase electricity consumption while gas usage will reduce, helping in mitigating the issue of circular debt”, he added.

He further stated that the entire SRO350, which presents numerous challenges, must be deferred as it needs to be revisited in consultation with all the stakeholders.

“Moreover, all the pending customs rebates, sales tax refund claims must be released in one go in the forthcoming budget”, he said, adding that DLTL was discontinued in 2021 which must be resumed under Textile Policy for exports and most importantly the DLTL refunds under textile policy were previously processed and ready for payment by SBP but the Finance Ministry has not allocated funds to release the said approved DLTL which need attention.

He also requested the Prime Minister to grant to grant status of Industry to the Modern Warehousing & Logistics Sector in order to create an enabling environment, encourage local & foreign investment to develop and promote warehousing & logistics.

“In the pattern of SIFC, we appeal to introduce single window for industry for all government-related issues and obligations.”

KCCI President Iftikhar Ahmed Sheikh, in his remarks, appealed the prime minister to take notice of the illegal and unjust raids being conducted by the officials of Customs Intelligence/ enforcement in the absence of the importers which creates a lot of problems and is a major cause of harassment to businessmen which needs to be promptly addressed. He suggested that instead of confiscating goods during raid at night, the Customs Officials should seal the premises and wait for owner to come in the morning and then the goods should be confiscated in his presence. President KCCI also requested Prime Minister to regularly meet the business community of the largest city at least after every three months either in Karachi or Islamabad so that the issues being faced could be promptly resolved which would definitely go in favor of the economy.

Copyright Business Recorder, 2024