KARACHI: Dispelling the impression that the upcoming mini-budget being announced on January 23 would be loaded with new taxes, federal Minister for Finance, Revenue and Economic Affairs Asad Umar has said that it will focus on ease of doing business and other measures to facilitate trade and industrialisation.
The minister was addressing members of the business community during his visit to the Karachi Chamber of Commerce and Industry (KCCI) and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday.
The minister also visited the residence of Pakistan Tehreek-i-Insaf (PTI) member and former chairman of Rice Exporters Association of Pakistan (Reap) Rahim Janoo.
Talks with IMF under way though govt not in a hurry to approach it for support, minister tells business community
Mr Umar said last year had been difficult not only for the government but also for the business community as during the five months of the current fiscal (July-November) only $818 million came under Foreign Direct Investment (FDI) against $1.35 billion in the same period of last financial year.
However, he said, the country’s standing in the index for ease of doing business improved to 136 from a recent ranking of 147 among 190 countries but the PTI government would strive hard to bring it down to double digit.
The minister disclosed the World Bank had taken a number of measures for improving ease of doing business for Pakistan but they were still below the level of other economies in the region.
He said cost of doing business was a major problem for the industry in Pakistan as it was higher than other regional countries particularly with regard to the utilities costs and tariffs. Citing an example, he said gas tariffs in Bangladesh, India and Vietnam are $3.35, $4.60 and $6 respectively, whereas it was $7.96 along with added cost of Rs2,000 as Gas Infrastructure Development Cess (GIDC) in Pakistan.
The minister agreed that multiple taxes in Pakistan was another hurdle in fast industrialisation and economic growth as a lot of time was consumed by entrepreneurs in sorting tax issues and all this had to be corrected in due course as the government was fully committed to promoting investment and generating jobs.
Rs400bn refunds outstanding
Responding to a question raised by FPCCI President Daroo Khan Achakzai, the minister said that Rs400 billion outstanding refunds pending with the government and belonging to export trade would be disbursed soon.
The finance minister said the country’s biggest province Balochistan deserved to be given special attention as the country’s development depended on its progress and prosperity.
He said that for improving border trade at Chaman, a special committee had been set up under Balochistan Chief Minister Jamal Kamal Khan and commander of the army’s southern command, and provincial finance minister and members of the Quetta chamber as its members.
Mr Umar said the government wanted to bring structural changes in border trade and also make it legal as locals had been depending on it for centuries. He also said that credit facility would be provided for trade in Balochistan, as banks were currently reluctant to give credit.
Mr Umar said that a Special Economic Zone (SEZ) at Gwadar was being developed but it would take some time. He said both the federal and provincial governments had agreed to work in the meantime on existing industrial estate at Hub and all infrastructure facilities including power of 1,200 megawatts would be set up. “We are focused to remove all unnecessary departments, which become hurdle in way of progress and added that presently five departments are engaged in a work that could be done by one,” he lamented.
Responding to a question, the minister said negotiations with the International Monetary Fund (IMF) were under way though the government was not in a hurry to approach the IMF for support.
Addressing the business community, Mr Umar said the private sector would have a leading role in the 21st century whereas the government would only provide infrastructure and work as facilitator by removing all sorts of bottlenecks for quick investment and industrialization.
He said professionals were being inducted in financial institutions on merit while the discretionary powers of low-ranking officials of the Federal Board of Revenue (FBR) were being withdrawn.
In reply to a question, the minister said there was nothing secret about the debts taken under the China-Pakistan Economic Corridor (CPEC) as their details had already been made public.