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Business & Finance

Miftah asks multinationals to present export plan in exchange for tax breaks

  • Finance minister says that with positive IMF talks underway, an economic turnaround is expected very soon
20 May, 2022

Finance Minister Miftah Ismail has urged foreign multinational companies operating in Pakistan to present an export plan to the government in exchange for tax breaks.

Taking to Twitter on Friday, Miftah, who is presently leading Pakistan negotiations with the International Monetary Fund (IMF) for the resumption of the $6-billion Extended Fund Facility (EFF), lauded the role of multinationals operating in the country.

“I am truly grateful to all the foreign multinationals that operate in Pakistan, pay a large amount of taxes, provide employment and bring in technology. However, I request all of them to present to me a plan to export out of Pakistan also,” said the minister.

“I will give them tax breaks for that,” he added.

In another tweet, the finance minister welcomed the decline in the current account (CA) deficit for the month of April, which sharply declined by 39% during the month of April 2022, supported by lower goods import bill and record workers’ remittances.

The State Bank of Pakistan (SBP) late Thursday night issued the statistics of CA deficit, which was on increase for the last many months due to rising imports and became a matter of concern for the new government.

The SBP reported that current account deficit amounted to $623 million in April 2022 compared to $1.015 billion in March 2022, depicting a decline of $392 million.

“This is a very good sign for external stability,” said Miftah, adding that with positive IMF talks underway, “we expect a turnaround in the economic situation very soon.”

According to the SBP, a rise in workers’ remittances worth $315 million and a fall in imports by $246 million was the reason for this reduction.

On Thursday, Miftah held a meeting with Shini Yanagi, Vice Chairman of Indus Motor Company, and Ali Asghar Jamali, CEO of IMC.

During the meeting, the finance minister said that the government is cognizant of the issues of the business community and the hurdles they face to expand business activity.

He added that the government is committed to providing a conducive and friendly environment to investors and businessmen for the growth of economic activity and enhancement of exports. He also said that the upcoming budget will be business-friendly and will contribute in the promotion of exports and businesses in the economy.

Comments

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Syed Arif Hussain Zahidi May 20, 2022 12:08pm
Unbelievable, this is what I had in mind from years. Also for all multinationals present I automobile industry let them go for LEFT hand drive vehicles and export them to different destinations.
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SAMIR SARDANA May 23, 2022 06:08am
MNCs are located in multi locations,multi nations ,multi tax jurisdictions and multi trade blocks Due to supply chain disruptions,the cost of manufacture will increase in several jurisdictions Pakistan is a LDC So if there is a market X which is being serviced by a MNC (A) from X - but some intermediates are imported from nation Y.THIS MAY NOT BE VIABLE NOW - AS THE INTERMEDIATE COST MIGHT HAVE SHOT UP OR THE LOGISTICS COSTS MIGHT HAVE INCREASED, The Consumers in market X - want the LOWEST "TOTAL DELIVERED COST" MNC(A) HAS TO DELIVER THE GOODS TO THE CONSUMER IN MARKET X ,AT THE LOWEST "TOTAL COST TO DELIVER" THAT MNC(A) WILL HAVE A PLANT IN PAKISTAN - AND CAN NOW BE USED,,TO SERVE THE CONSUMERS, IN MARKET X.THIS WILL SPECIALLY APPLY TO AGRI BASED FOOD AND OTHER PRODUCTS,EXPORTED FROM PAKISTAN - WHERE INPUTS ARE LOCAL. SO THE PAKISTAN MNCs WILL NEED A SEA FREIGHT SUBSIDY,AND SOME DIRECT TAX SOPS AND SOME DUTY FREE ENTITLEMENTS.dindooohindoo
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