Market mixed over amnesty scheme for industrialists
The government’s decision to grant amnesty for industrial development has attracted mixed reactions. While some analysts have cheered the move, other expressed their reservations against it.
The leadership has decided to promulgate an ordinance to offer a third tax amnesty scheme to industrialists by giving them an opportunity to whiten their black money at 5% rate by investing in the manufacturing sector.
“The previous amnesty schemes failed to bring the desired results because the government did not address the fears of tax authorities,” Topline Securities Head of Research Atif Zafar told The Express Tribune. “There have been many instances during which notices were served to those who availed the amnesty schemes.”
He was of the view that the government also needed to turn investment environment friendly so that people would look forward to bring their wealth into the system in a bid to earn strong returns, he said.
On the other hand, Pakistan Businesses Forum (PBF) Vice President Ahmad Jawad opposed the tax amnesty scheme for industry.
Terming it laying of wrong foundation, he said that the public would bear grave consequences in future.
He questioned how could a government not demand money trail when businessmen were mulling to set up industries.
“I personally support industrialisation but there has to be some mechanism for it,” he said. “We can grant tax concessions for some period but giving total liberty is inappropriate in a civilised society”.
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According to him, only some business houses would benefit from the scheme.
On the other hand, not a single policy for horticulture exports and agriculture was released by the government in the last 3.5 years which can actually contribute to the country’s GDP, said Jawad.
He noted that the contribution of agriculture sector in the country’s economy was far more than the services sector.
The government has decided to waive off 24% tax and 29% penalties by allowing the people to invest their black money, giving a massive incentive to the industrialists, said Jawad.
An industrialist can avail the tax amnesty just by investing Rs50 million, he noted.
Instead of the amnesty scheme, Prime Minister Imran Khan should pour money in the forex market and strengthen the rupee against the US dollar. He noted that dividends of such a move would be far higher for the country than the amnesty scheme.
Arif Habib Commodities CEO Ahsan Mehanti said that the prime minister announced the package on suggestions of business hence a positive outcome was expected.
Published in The Express Tribune, March 4th, 2022.
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