Pakistan Business Council (PBC) has suggested accelerating the digitization of Pakistan, especially of the government processes, to ease doing business. In a letter, PBC's CEO Ehsan A Malik congratulated Asad Umar on his appointment as Finance Minister and suggested key reforms required to fix the fundamental flaws in the economy. He proposed preferred short-term measures to tie over the crisis, well -structured programme, IMF or otherwise, to bring the much-needed discipline and rigour to economic management.
He called for strengthened governance, especially in the Ministry of Finance and the Federal Board of Revenue (FBR) to implement the reforms to revive industry to help break out of the recurrent cycles of crises - this is the 13th time in 28 years that we may have to resort to an externally-dictated programme.
He summarised his proposals urging the Finance Minister to: 1. Unite the country behind a focused 'Make in Pakistan' thrust to create jobs, promote value-added exports, encourage import substitution, and broaden the tax base. Use the limited window of positive sentiment and goodwill to implement fundamental reforms. 2. Establish the envisaged Council of Business Leaders (CBL) to build consensus. The CBL should lead a comprehensive review of government polices to remove conflicts. It should align, in particular the trade, fiscal, energy and agriculture polices to promote domestic industry, remove the anti-manufacturing and pro-import bias, which has made us a nation of traders, happy to export jobs and import goods that can be made here. 3. Ensure regionally-competitive energy tariffs for industry to generate both employment and exports. Review existing power agreements, privatize Discos, address T&D losses, consider off-grid renewable solutions and indigenize fuel to reduce imports. 4. Promote up to 2 million private sector jobs in housing construction to address the 10-million-unit backlog and an annual requirement of 500,000 low and medium-cost houses. 5. Separate tax policy making from collection for a consistent regime that inspires investor confidence.
6. Address the technology and talent needs of the FBR to enable it to broaden the tax base. 7. Unify the multiple federal, provincial and local taxes under a National Tax Authority. Zero-rate exports to avoid the need for refunds. Automate rebates. 10. Withholding taxes for non-filers should at least be twice those for filers. Collections from non-filers should be used to increase both collection and widening of the tax base. 11. Chart out a course for harmonizing corporate and sales tax rates with the region. Remove the large differential between the tax rates of companies and sole traders to encourage corporatization. 12. Promote capital formation, accumulation and consolidation by phasing out super tax, remove penalties on retention of profit, exempt inter-corporate dividends from cascading taxes and restore group taxation to the basis in the Finance Act 2007. 13. Ensure cascading tariffs on raw and intermediate materials to encourage local manufacturing. 14. Renegotiate the FTA with China. Refrain from new agreements that undermine local industry. 15. Review and close all avenues of under-invoicing, under-valuation and smuggling. Immediately crackdown on the blatant sale of smuggled items. 16. Focus FDI to export generating industries, technology-oriented sectors and those for which the Pakistan private sector lacks capital and risk appetite, such as infrastructure and oil and gas exploration. Tailor concessions to promote joint ventures and public listing. 17. Address the distortion created by incentivizing growth of sugar-cane and wheat at the expense of cotton (required by the textile industry), and oil-seeds (deficiency of which forces us to import US$ 2 billion of vegetable oils annually). Transform dairy and livestock from its current state of subsistence. 18. Take state-owned enterprises out of the control of line ministries, professionalize their boards and managements, restructure and then privatize those that don't make strategic sense to retain. 19. Make costs, benefits and financial flows associated with CPEC fully transparent and ensure that concessions in SEZs do not undermine existing industry.
Comments
Comments are closed.