RECORDER REPORT
KARACHI: The Pakistan Business Council (PBC) Monday unveiled its 100–day economic agenda to guide incoming government to set Pakistan on a strong and sustainable growth trajectory.
In his presentation on the 100–day economic plan, Ahsan Malik, Chairman PBC said an incoming government will need to manage the external account and the fiscal deficit.
He suggested the incoming government to correct the balance between “control” and ”support” in polices and address the bias against businesses.
“Under a high-level body, led by the PM and with private sector representation, conduct a comprehensive scan of key policies of all ministries which impact the economy: finance, commerce, textiles, industries, power, labor and of provinces in taxation, education and agriculture,” the PBC suggested.
The PBC also suggested creation of 2 to 3 million jobs annually by improving availability of energy. “Energy at regionally competitive cost would result in a quantum jump in employment,” it said.
Ahsan Malik said long-term industrial and export policies would give business the confidence to invest in transforming capability and capacity, leading to more employment opportunities The PBC also suggested the incoming government to encourage indigenization of fuel, gradually phase out the less efficient power plants and those that use more expensive fuels, invest in hydel and renewable energy, fix the grid and deal more aggressively with transmission and distribution losses including theft. The PBC also suggested that tax should be levied on profits, not turnover and all in taxable activities must file returns.
“Import valuation methodologies on sensitive items should be strengthened to curb under-invoicing,” Malik said.
Malik said brazen sale of smuggled and counterfeit goods must be clamped down by customs and provinces working in alignment. On trade agreements, Malik said trade agreements with Turkey, Thailand or others should not be pursued at the expense of local jobs.
“The FTA with China should be renegotiated to stem the large trade deficit. Parity with ASEAN on Pakistani goods and encouraging more value addition in Pakistan instead of exporting finished goods would be two deliverables,” Malik added.
He said the incoming government should target FDI in essential sectors: agriculture, exports, infrastructure and technology rather than short pay-back sectors such as FMCG which are market seeking in nature, leveraging on Pakistan’s large and middle class consumption.
He said incoming government must phase out Super Tax and avoid knee-jerk revenue raising measures that hit business confidence. “The government should restore group taxation to the Finance Act 2007 basis to encourage formation of capital through holding companies,” he added.
He also advised to expedite water course maintenance and invest in water storage to boost agriculture as also to preserve increasingly scarce resources.
“Pakistan’s reservoirs can store only 10 percent versus 40 percent global norm. Securing water supply under Indus Water Treaty and from Kabul River are crucial,” he added.
On State Owned Enterprises (SOES), Malik advised that all SOEs be transferred to Government Holding Company (GHC). The GHC should be placed directly under the control of prime minister besides legislation be introduced in the first session of parliament to allow for this change.
Ahsan Malik said incoming government must ensure that CPEC Special Economic Zone concessions do not hurt existing industry and deliver incrementally to employment, export and import substitution.
“The government must provide complete transparency of costs, benefits and financial flows associated with CPEC projects,” he said.
Economist Shabbar Zaidi stressed the need for empowerment of the Planning Commission. “We need economic plans not visions,” Zaidi said, adding that the country’s annual sustainable tax collection is Rs 8,000 billion while tax collection institutions only manage to collect Rs 4,000 billion.
“We do not have to increase tax rate but to curb non-decelerations and under invoicing.” He said rural economy should also be documented to bring it into tax net. Leading businessmen Arif Habib, Toufeeq Chinoy and others also spoke on the occasion.
