Prime Minister Imran Khan has vowed to facilitate the business community in a meaningful manner. While chairing a meeting on the licensing regime in Pakistan last week, he directed to abolish unnecessary taxes and inspections. Around 150 licences are required for small shopkeepers and businessmen. He also directed all the provincial governments to eliminate 74 different licences of this nature. He advocated the introduction of an automated system by employing modern technology.
In return, the business community must recognise the dire need for paying taxes, the prime minister asked. "The country can never prosper without taxes and we are trying hard to introduce a tax culture in the country. Pakistan ranks one of the lowest in the taxpaying countries," the Prime Minister added.
The step taken by the PM to abolish licence regime and enforce automation is a much-needed step. To this must be added the regime of multiple NOCs which a businessmen has to undergo. The government must apply automation regime to industry, construction and real estate businesses where projects are delayed on this very account.
The abolition of this regime has two great advantages:
1) It reduces the cost of doing business and significantly contribute to ease of doing business;
2) The discretionary power resting with one individual or the fraternity of civil servants grouped together for this common cause is one of the biggest sources of corruption in the structure of bureaucracy in Pakistan. The abolition will cut short this widespread source of corruption.
Many of the licences and NOCs applied on business, construction and real estate, in particular, are superfluous, meaningless and of no financial or rules-compliance value to Pakistan.
A prominent business tycoon, for example, by publicly remarked that he puts "wheels" on his file to make it roll through all checks and balances which licences and NOCs are meant of enforce. There cannot be a better explanation to the system now in vogue.
What is needed are clearly defined rules and regulations and their widespread publicity as against the present practice of maintaining ambiguity to exercise discretion.
The responsibility of full application of rules and regulations must rest with the business community. There should however be enforced a regime of heavy penalty for the defaulters. The success of the new regime of self accountability will be on endorsement of rules and regulations.
The new regime will not be able to entirely wipe out the corruption from the system. But it will significantly limit it by blocking the multiple and superfluous channels now in place.
Moreover, the new regime will provide the rule-abiding businessmen with an opportunity to conduct their businesses on a better financial footing. Subsequently, with enforcement put in place, the defaulters will also fall in line.
(The writer is former President, Overseas Investors Chambers of Commerce and Industry)