Federal Finance Minister Senator Muhammad Aurangzeb said on Saturday that continuous and meaningful dialogue between government and business community was essential, as engagement limited only to the budget does not provide sustainable solutions.
Addressing All Pakistan Chambers Conference organised by Lahore Chamber of Commerce and Industry (LCCI) at a local hotel, he added that very positive and constructive discussions had taken place between the federation and the provinces on the NFC Award, resulting in the formation of eight working groups, with progress expected by January 15. He said that SBP had received USD 1.2 billion after the approval of the IMF programme and invited the private sector to participate in the privatization of PIA.
Finance Minister Muhammad Aurangzeb clarified that the IMF diagnostic and corruption report was the result of a transparency process initiated by the government itself and did not target any specific government. He said an action plan is being prepared to address the structural weaknesses identified in the report. He termed remittances the backbone of the economy and said efforts were underway to develop the local bond market and deregulate commodity markets. He added that PASSCO would be abolished and strategic reserves would be maintained through the private sector.
The finance minister said the Tax Policy Office had been separated from the FBR and placed under the Finance Division to ensure long-term and stable policy making. He acknowledged that the formal sector and salaried class are under pressure and said action was being taken against non-compliant sectors. He emphasized that only the private sector can drive economic growth, while the government’s role is to provide a conducive business environment.
He further said that large-scale manufacturing has grown by four percent, IT exports have crossed USD four billion, and remittances are expected to reach USD 41-42 billion. He also mentioned steps related to PIA privatization, crypto, blockchain and the digital economy, and proposed the establishment of a research cell at the Lahore Chamber. He reaffirmed the government’s commitment to SOE privatization, tariff reforms and export-led growth, and assured continuous engagement with the private sector.
Addressing the conference, LCCI President Faheem Ur Rehman Saigol said that cost of doing business in Pakistan has reached at an unbearable level, creating an urgent need for relief for industry. He said that a high policy rate and expensive electricity and gas are forcing industries to relocate abroad. He stressed that IPP agreements must be subjected to a forensic audit and electricity tariffs should be brought at par with regional countries. The LCCI president emphasized that non-filers should be incentivized and brought into the tax net, while existing taxpayers should be facilitated. He called for a simple and transparent tax system and the abolition of unnecessary withholding taxes. He said that Pakistan is facing a growing trade deficit and that exports must be promoted by facilitating exporters, restoring the Final Tax Regime and ensuring timely payment of duty refunds.
Saigol added that investment in the country is low and stressed the need to promote domestic investment. He also called for collateral-free and cash-flow-based financing for SMEs to create jobs and boost exports.
Speaking on the occasion, SAARC Chamber Vice President Mian Anjum Nisar said that high electricity prices are a fundamental issue. He said Pakistan’s exports have stagnated at around USD 30-35 billion, while countries which were once far behind have moved ahead. He noted that electricity prices in the region range between 7 to 9 cents, while in Pakistan they have risen to around 12.5 cents, and that regional interest rates are between 3 to 6 per cent compared to 11 per cent in Pakistan.
Senior Vice President LCCI Tanveer Ahmed Sheikh said that the FIR culture against traders must end, adding that if local investors do not feel secure, attracting foreign investment will be very difficult. Presidents of the Chamber of Chaman, Quetta and Sarhad called for opening of border trade as the closure is hurting their exports to Central Asian states.