Aurangzeb inspired by Singapore’s nickel exports model

HASSAN ABBAS

LAHORE: Finance Minister Senator Muhammad Aurangzeb Saturday stated that Singapore’s nickel exports, worth $22 billion, serve as a prime example of how a single mineral can drive economic growth. He emphasized that Pakistan’s copper reserves hold similar potential to boost the country’s exports.

Speaking on growing international interest in Pakistan’s mineral and IT sectors, Aurangzeb said the government is committed to removing barriers to attract both local and foreign investments in these key areas.

“Global investors are increasingly looking at Pakistan’s mineral wealth and IT capabilities,” he said. “Our focus is on creating a business-friendly environment to unlock this potential.”

Speaking to traders at the Lahore Chamber of Commerce, Aurangzeb said the recent reduction in the central bank’s policy rate has played a pivotal role in promoting economic recovery.

“The economy is heading in the right direction,” he said. “We are committed to supporting industry and ensuring that investors receive all necessary facilities. The business community’s concerns must be prioritised.”

He added that industrial growth was essential for sustained economic stability, and that the government’s economic team was focused on enabling productivity through lower input costs and structural reforms.

Aurangzeb said the government was also working to ensure that the benefits of declining inflation were passed on to citizens.

“We are closely monitoring prices of essential commodities to make sure the common man feels the relief,” he said.

Lahore Chamber President Mian Abuzar Shad, Senior Vice President Senior Vice President Engineer Khalid Usman, Vice President Shahid Nazir Chaudhry, SAARC Chamber Vice President Mian Anjum Nisar and Executive Committee Members also spoke on the occasion while representatives of FBR and other chambers were also present in the meeting.

Finance Minister added that under Prime Minister Shehbaz Sharif’s leadership, the economic direction of the country is being steered with clear goals and visible results will soon be evident.

Muhammad Aurangzeb said that hurdles in profit repatriation for foreign investors have been addressed which boosted their confidence in the Pakistani market. We are ensuring that the benefits of reduced inflation directly reach the common man. Middlemen will not be allowed to exploit the system.

While talking about taxation, he admitted that the salaried class is bearing tax burden, as income tax is deducted at source. “We intend to offer relief to the salaried segment,” he said and added that 24 national entities have been earmarked for privatization. He stressed the need for reduce human interaction to resolve systemic issues.

He was of the view if we can increase the tax-to-GDP ratio to 13%, we can offer broader relief to various sectors.

LCCI President Mian Abuzar Shad appreciated Government Initiatives for economic revival of the country. He praised the government’s efforts in curbing inflation and reducing the policy rate saying that we appreciate the reduction in the policy rate from 22% in June 2023 to 12% now. This will ease access to capital for businesses. With inflation dropping sharply from 20.7% in March 2024 to just 0.7% in March 2025, we are hopeful of continued improvement.

He also paid tributes to the launch of the “Uraan Pakistan” program, led by the Prime Minister, which aims to raise economic growth, increase exports to $60 billion, attract $10 billion in private investment annually, create 1 million jobs per year, raise the renewable energy share to 10%, eradicate poverty and mitigate climate challenges. He also highlighted the role of the Special Investment Facilitation Council (SIFC) in enhancing investor trust.

The LCCI President said that recent tariff measures by the Trump administration had triggered uncertainties in global markets, but Pakistan now has a unique opportunity. Our tariffs on Pakistani products are relatively lower than those faced by regional competitors like Bangladesh, Vietnam and Sri Lanka. This positions Pakistan to expand exports to the US market.

He added that industry’s share in GDP fell from 20% in 2017-18 to 18.2% in 2023-24. In the first two quarters of this fiscal year, the industrial growth rate remained negative at -0.66% and -0.18% respectively. High business costs, including expensive raw materials, gas tariffs, MDI charges on closed units and excessive duties, are making our industries uncompetitive.

He said that Pakistan’s trade deficit in the first nine months of the fiscal year had reached $17.9 billion, with industry shifting abroad due to lack of business facilitation. In the first eight months of this fiscal year, foreign direct investment was only $1.62 billion. This reflects a lack of confidence from both local and international investors. Unless we address the core problems of domestic industries, we cannot stabilize the economy.

Mian Abuzar Shad urged the government to ensure cheaper electricity and gas for industries and to maintain financing costs in single digits to promote exports and curb imports. He said that LCCI believes in expanding the tax base and urge the government not to overburden existing taxpayers. Facilitate current taxpayers so that new entrants are encouraged to join the tax system.

He stressed the need for tariff structure reforms to promote industrial growth and recommended adopting a cascading tariff model to ensure raw materials are taxed minimally, encouraging local production and value addition.

LCCI Senior Vice President Engineer Khalid Usman stressed the need to revise the turnover threshold for withholding agents, proposing an increase from Rs. 100 million to Rs. 250 million in light of the sharp depreciation of the currency and prevailing economic conditions. He expressed serious concern over the Federal Board of Revenue’s (FBR) continued issuance of notices and freezing of bank accounts despite the pending Supreme Court case regarding 1% Capital Value Tax (CVT) on declared foreign assets under the amnesty scheme. “This practice is causing undue hardship to individuals and must be halted immediately,” he added.

He further urged the government to ensure timely disbursement of tax refunds, particularly to exporters, to support liquidity, stimulate investment, and maintain momentum in economic activity. He pointed out that FBR often delays refunds for up to a month, despite the 72-hour processing requirement under the FASTER system. “If refunds are not released within 15 days, FBR should pay exporters with mark-up,” he stressed. To improve efficiency and transparency, he also recommended that income tax refunds be processed through an automated system similar to the one used for sales tax.

Vice President Shahid Nazir Chaudhry underscored the importance of long-term economic policy planning, suggesting that key economic strategies should be framed within a consistent 10-year roadmap to ensure stability and sustainable growth. He called for the removal of the Sindh Infrastructure Development Cess (SIDC), levied at 1.8%, which cannot be claimed as a refund and adversely affects the competitiveness of exporters.

SAARC Vice President Mian Anjum Nisar highlighted the role of innovation in economic advancement, Shahid Nazir proposed that private companies engaged in Research and Development (R&D) should be allowed to deduct R&D expenditures from their taxable income. “This will encourage the private sector to invest in technological innovation and research, ultimately benefiting Pakistan’s economy.