The business community is playing a vital role in running the economy and the government should finalise the upcoming budget in consultation with major trade bodies and business chambers, said Islamabad Chamber of Commerce and Industry (ICCI) President Sardar Yasir Ilyas Khan.
In a statement on Wednesday, he stressed that Pakistan needed to boost trade and industrial activities in order to achieve early revival of economy.
“Government should reduce interest rate to 3% in the next budget as it will pave the way for availability of low-cost credit to the private sector and accelerate the pace of industrialisation and investment in the country,” he said.
According to him, the general sales tax rate of 17% is the major factor behind the high cost of doing business and hike in inflation in Pakistan. Keeping this in view, he urged the government to reduce the sales tax rate to a single digit in the upcoming budget to slash the cost of production and combat inflation.
He was of the view that the decrease in sales tax rate would also turn country’s exports competitive in the international market. Khan said that Pakistan relied mostly on raw material and agro-based commodities for exports and underlined the need for focusing on production of value-added products to give a significant boost to exports.
“For this purpose, the government should allow duty-free import of industrial machinery, equipment and technology, which will enable the industrial sector to upgrade itself in order to produce value-added and hi-tech products for exports,” he said.
“The government should also consider providing incentive packages for all major industries similar to the relief package announced for the construction sector.” He held the firm opinion that the government’s support could trigger an industrial revolution in the country. The government should also reduce taxes and duties on vehicles to promote investment in the automobile sector, he said.
The ICCI president highlighted that Pakistan possessed tremendous potential to improve its economy by promoting the tourism sector.
He called on the government to allow duty-free import of goods needed for the development of tourism-related projects including tiles, lights, electrical, mechanical and IT equipment and machinery.
Published in The Express Tribune, May 20th, 2021.