KARACHI: The Federal Board of Revenue’s taxation system has created an anti-investment climate as its sole objective is collecting higher taxes by any means, said Adviser to PM on Institutional Reforms and Austerity Ishrat Husain, adding that the government was engaged in bringing reforms to attract foreign direct investment (FDI).
Addressing a conference on ‘Promoting Informed Investment Decision-Making along CPEC and Belt & Road’ at the Pakistan Stock Exchange on Saturday, he said, “The authority harasses businessmen while sometimes it acts like it is demanding extortion money rather than taxes.”
The government is going to introduce various reforms to bring FDI in the country, he added. Citing efforts made by the government, he said first of all it has changed its direction from import sector to the export sector. “This government is trying to attract foreign direct investment in the export sector so that the country should not remain only consumer-oriented.”
He conceded that there is a need to transform the FBR and the government is working on introducing reforms to improve it. Husain remarked that he was amazed by NADRA’s data, which it was not employing to its full potential.
He was of the view that the tax system should be synchronised with NADRA’s data, which will make it easier for the businessman to pay their taxes. “Data analytics can help us increase the tax net.”
“With this system and reformations we will help businessmen to pay their taxes who were scared of extortion and harassment by FBR,” he remarked. Talking about the progress of China-Pakistan Economic Corridor, he said the corridor has entered the second phase, which will focus on special economic zones, industrialisation and agriculture.
He said that the government will introduce reforms in the PSX to attract FDI. For example, index-heavy sectors, like banks and energy companies with almost 50% part in the KSE-100 index, will be changed by introducing benefits for other sectors, he shared. “When something happens in these two areas the PSX either jumps high or plunges deep.” “We are strengthening reforms to make PSX a stable place for returns not a casino,” he commented.
The adviser said that Pakistan has targeted to increase the share of renewable energy to 30% and for this purpose, the government is introducing easy process for licensing and other matters.
Pakistan wants to create jobs as one to two million youth enters the Pakistani market every year, he said. “Jobs are very important for Pakistan and the government is planning to make opportunities in tourism, housing and construction sector as these are the avenues where jobs can be created. These sectors are labour-intensive and give spill-over effects to other sectors also.”
Also speaking on the occasion, PSX CEO Richard Morin said that Pakistan’s economy is undocumented up to 70% and its real estate sector is over invested due to which money is not coming to capital market.
“The government should introduce policies through which savings of the people should come to capital market where companies can get money for their financing and this is how economic activity will generate.”
In the second phase of CPEC, Chinese companies are interested in joint ventures with Pakistani companies as the SEZs will give same benefits to Pakistani investors as Chinese investors, said Pak China Investment Company Director Tariq Mahmood.
Published in The Express Tribune, April 21st, 2019.