According to recent news, the PTI government intends to introduce new economic zones to encourage small and medium-sized industrial projects with the aim to boost the economy. While this idea in itself is commendable, it must be carefully implemented because many such initiatives in the past not only failed but become a means of corruption.
The main reason for such failure is that elite industrialists and businessmen end up taking all such relief. This not only crowds out new entrepreneurs but is also used by these elites as a tax evasion ploy. Their intention is to show a profit at units set up in such economic zones in order to take advantage of the tax holiday. In many cases, these rich hypocrites start ensuing losses in their current units elsewhere in the country while showing huge profits in the units at new economic zones, thus avoiding taxes on their incomes. The result is that new entrepreneurs do not get a chance to try their luck and not much employment is created either. What is even worse is that the FBR revenues suffer a great deal because of this.
Therefore, it is vital for the Prime Minister to look into old economic zones and find out the reasons for their failure before initiating new ones. The government must put in place a system which ensures the involvement of fresh entrepreneurs who are passionate about future progress and prosperity. Only then can time heal the wounds of corruption.
Raja Shafaatullah
Islamabad
Published in The Express Tribune, September 25th, 2020.
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