Govt unveils plan to cut rising production costs

Federal Minister for Commerce Jam Kamal Khan stated that the government has devised a comprehensive strategy to address the rising production costs and promote the manufacturing sector in Pakistan.

Speaking to the business community at the Lahore Chamber of Commerce and Industry (LCCI) on Wednesday, Khan stressed the importance of a conducive business environment to reduce unemployment and promote SMEs.

He asserted the Ministry of Commerce’s responsibility to maintain contact with the business community to understand and resolve their issues, with a focus on trade, export, import, manufacturing, and tariff competitiveness.

Khan acknowledged the need to tackle issues like circular debt, IMF conditions, and institutional inefficiencies that burden consumers.

He assured that Prime Minister Shehbaz Sharif is committed to involving relevant stakeholders in addressing economic challenges.

LCCI President Kashif Anwar welcomed the minister and highlighted the business community’s challenges, including inflation, currency depreciation, rising energy costs, high-interest rates, and increased cargo delivery charges.

Anwar pointed out that recent SROs (457, 350, 1842) have added to the tax burden on registered individuals.

Anwar suggested a revised tariff structure with 0% duty on basic materials, 5-10% on intermediate goods, and higher slabs for semi-finished and consumer goods to simplify the complex duty system.

He also recommended reducing duties on machinery and intermediate goods to facilitate technological advancements.

He emphasised the importance of accessing untapped markets such as Africa, Central Asia, and ASEAN countries to boost exports.

Besides textiles, rice, and leather, Anwar highlighted the potential of sectors like halal food, pharmaceuticals, IT, and engineering. He also discussed the implementation of a barter trade mechanism with Iran, Afghanistan, and Russia through SRO-642, expressing hope for improved trade with neighbouring countries.

The minister stressed that overburdening the business community with taxes could reduce business activity and government revenue.

He called for the tariff board to be business-oriented rather than tax-oriented and added that the Ministry of Commerce will participate in the anomaly committee to ensure the business community’s concerns are addressed.