OICCI survey: Index points to fresh concerns

Energy and security top issues, but business community worried about policies now

KARACHI: Numbers might indicate that the business community’s confidence is increasing, but there remains a deep-rooted concern among experts that policy measures and abrupt taxation measures will haunt the government soon.

Without a shadow of a doubt, Pakistan’s top-most concerns in 2013 – the year when PML-N came into power – were security and load-shedding. The business community was vocal and so was the general public. Hence, it made sense for PML-N to address the two issues, as it garnered hope of increasing popularity.



Nearly half-way through its term, the government has made improvements on both accounts.

But pressing needs have evolved now.

Now, the business community expects the government to focus on reducing cost of production and put in place a proper regulatory framework.

In a recent business confidence survey, overall business confidence in the country jumped 4 percentage points from 18% in March 2015 to 22% in November 2015. The survey, which was conducted throughout Pakistan, was sponsored by the Overseas Investors Chambers of Commerce and Industry (OICCI), a highly reputed association of 196 multinationals operating in Pakistan.

However, the confidence level of OICCI members reduced from 48% to 41% in the same period. This may have to do with abrupt tax measures and long delays in tax refunds process.



Concerns like energy shortage and security may have held the top spots but survey data reveals a changing trend. The business community expects to be up against a different breed in months ahead. For instance ‘Increase in Prices’ clinched the second spot from ‘Security’, as per the survey in November compared to that of March when correspondents were asked to list top concerns in the past six months.



Similarly, concerns over ‘Poor Policies’, ‘Rules & Regulations’ and ‘Increase in Prices’ over the next six months have registered an uptick, as per the latest data compared to March’s. For instance, concerns over ‘Poor Policies’ increased from 6% to 22%. Conversely, concerns over energy and security have subsided.

The fact that business community is less concerned about energy and security might be an encouraging sign, but growing concerns over other areas reveal the lack of foresight.

“The government lacks consistency in policies. The recent mini-budget in which the government imposed additional Rs40 billion taxes is a prime example of how the government is running tax affairs,” said Invest & Finance Securities CEO Muzzammil Aslam.

“The bureaucrats are the main architects of the current taxation measures that the government has taken,” he said. “There is also a lack of accountability as the ministers and advisers who are not delivering are not held accountable.”



The government is under severe pressure from different quarters for not announcing major policies. For instance, unusual delay in trade policy and auto policy has created an embarrassing situation for the government.

“The trust on the government policies is wavered because it has taken unusual taxation measures and increased gas and electricity prices,” said Sherman Securities analyst Saqib Hussain Khan.

Sympathising with the authorities, Khan added, “The government had no option but to introduce Rs40 billion new taxes because it was facing serious drop in revenue collection.

“However, considering the past record of tax collection, it seems the government will continue to face revenue shortages.

“All these abrupt taxation measures will create resentment against the government policies, but I think the government has to take such measures to retire the ballooning country’s debt,” he said.

The writer is a staff correspondent

Published in The Express Tribune, December 7^th,  2015.

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