ISLAMABAD: Chairman Coordination, Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Raza Khan on Thursday urged the government to announce a bailout package for leasing sector.
Speaking to business community and representatives of leasing companies, he said that few years back there were about 33 leasing while 20 Mudaraba-based investment and finance companies.
Leasing has great potential but it faces serious handicaps like unhealthy environment, lack of qualified staff, tax considerations, delayed payments, bad debts and premature credit decisions which is marring its growth, he said.
He said today we are left with only few active companies while a dozen semi-active concerns adding that institutions like World Bank and IFC have also reduced financing to leasing companies since the State Bank lifted the exchange cover.
He said that turnover tax imposed on gross receipts of the leasing companies is not helping raise funds, tax should be on profit and not the principal amount, he demanded.
He said turnover tax has increased problems for leasing businesses while reduced share of taxes for the government and recovery process is also slow which is hurting the recovery process, adding that increase in number of banking courts can resolve this issue.
Leasing professionals to revisit strategy for finance leasing, operating leasing and contract hire and prefer business with tested clients to remain sustainable in these difficult times, he said.
Copyright APP (Associated Press of Pakistan), 2011
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