Lahore: The Lahore Chamber of Commerce & Industry has called for a business friendly upcoming budget and said that the federal budget 2021-22 has become the most important document in the context of COVID-19 which has shattered the basis of economy.
While talking to a group of businessmen, the LCCI President Mian Tariq Misbah, Senior Vice President Nasir Hameed Khan and Vice President Tahir Manzoor Chaudhry said that budget is the most important document for any country as it sets economic directions for the entire year. “It is important that budget for FY 2021-22 should have doable suggestions of business community in its fold.”
They said that Pakistan is energy and water starved country and needs to make substantial investment for the development of power sector infrastructure that is capable of meeting the growing needs of the economy. They said that government should ensure substantial amount of public investment first into transmission and distribution infrastructure.
The LCCI office-bearers said that to tackle circular debt on sustainable basis – ultimately Pakistan would have to ensure that the electricity power sector is efficient and competitive.
This would require consistent structural and institutional reforms. In particular, removing subsidies and adherence to full cost recovery will have to be ensured. They said that tariffs should fully reflect normal profits. The sector’s large debt overhang also needs to be eliminated on sustainable basis.
They said that in view of the substantial and untapped potential of alternative sources of energy, sufficient funds should be dedicated to the development of bio-fuels, bio-mass and other renewable sources of energy.
The technology is already available to produce energy by various resources such as Jatropha etc. They said that Jatropha is already being used to produce bio-diesel in a number of countries such as India, Brazil, Philippines, etc. They said that these plants can be easily grown on poor quality, waste or arid land which is abundantly available in various parts of the country such as Cholistan. They further stated that bio-mass including wood, dung, agriculture residues which is available at a very low cost in Pakistan can also be used for energy purposes.
The LCCI office-bearers said that special attention should be given on hydel power projects to produce cheap electricity. They said that Kalabagh dam should not be sacrificed to the political wills of some elements. It is not just a project; it is a fate changer. They said that one million acre feet of water gives benefit $2 billion annually to the economy while Pakistan is throwing over 35 million acre feet of water to the sea because of delay in construction of Kalabagh Dam that’s mean that we are wasting $ 70 billion annually. He said that Kalabagh dam should be announced in the forthcoming budget.
About taxation, the LCCI President said that neither the existing system is economically neutral, taxpayer friendly, equitable, progressive nor facilitative and supportive to generate healthy business activities for all. Taxation is of course important source of revenue collection but tax policies must be based on the best international practices and universally accepted canons of taxation. It is a matter of serious concern that with the existing narrow tax-base, the policy makers instead of revolutionize the tax policy options, seems defendant on the burdening of the existing taxpayers.
They added that various distortion in the existing tax policies can be removed if the feedback of all the representatives of business organizations is given due consideration by the FBR authorities. It is universally admitted fact that public policy makers can make noticeable difference by linking their mindset to ground realities. He said that number of taxes and frequency of paying taxes must be reduced.
About CPEC, they said that projects like this have potential to stimulate local economy by increasing the demand of locally manufactured goods. Such increase in demand will not only allow full utilization of existing manufacturing capacity but will also encourage manufacturers to increase their capacity.
The LCCI office-bearers said that business community has serious reservations with regard to current performance of FBR for disbursing refund cases of Sales Tax and Income Tax. The Exporters are suffering the most because they are facing serious issues of shortage of working capital.
They urged the government to take steps to control smuggling at the borders and Frontier core deployed there should be equipped with state of the art technology and made them more vigilant and to advise them to play their role in controlling the smuggling by exercising their authority. They suggested that duties on such goods which are prone to smuggling should be reduced as it has been practiced successfully in many other countries.
They said that Pakistan needs a Long Term Integrated Export Strategy. They said that removal of business climate challenges can help considerably in this regard.