FPCCI, corporate sector on the same page

Federation president says both share same concerns ahead of budget.

KARACHI:

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zakaria Usman has said the FPCCI – the country’s apex association that represents 46 chambers – and the corporate sector are on the same page on how should the government tackle major economic challenges.

“There may have been some differences in the past regarding the budget proposals of FPCCI and other chambers that represent the corporate sector, but this year we are all unanimous in our concerns,” said Usman, while talking about the widespread impression that there might be major differences in budget proposals between the FPCCI and the corporate sector.



“It is wrongly assumed that FPCCI supports trade over manufacturing and that it is against documentation of the economy,” he stressed.

In an unusual accusation, General Tyre – a local tyre maker – recently said that the FPCCI was supporting tyre importers at the cost of the local industry.

Replying to a question, Usman said that the apex body was not against General Tyre and it recommended reduction in the import duties just to make smuggling less attractive in the country.

Despite FPCCI’s commitment to documentation, broadening of tax net and local industry, the corporate sector of the country blames the apex body for not pushing its 55,000 members towards proper documentation.

Independent analysts believe that FPCCI and the corporate sector of the country have major differences in their priorities that are highlighted when they approach the government with their budget proposals. While both stress on broadening of tax net, they often disagree when governments take specific tax measures.

The representatives of the corporate sector often stress that successive governments have succumbed to the pressure of different business lobbies and burden those who were already documented and heavily taxed.

Overseas Investors Chamber of Commerce and Industry (OICCI) – an increasingly vocal association of 196 multinationals operating in Pakistan – is a member of FPCCI but it has its own independent voice on economic issues. According to OICCI, their members contribute one-third of the total tax collection of Federal Board of Revenue (FBR).

“By and large, we think that OICCI and FPCCI both support documentation and broadening of the tax base in Pakistan. We both support fighting against tax evasion under any form or shape,” OICCI Secretary General Abdul Aleem said when asked why the two have different approaches.

However, in response to a question, Aleem said that as a responsible corporate citizen we get very concerned when we notice that some of the trade bodies and interest groups argue with the authorities for not using computerised national identity cards (CNIC) to monitor one’s tax eligibility. “Thus, documentation and broadening of tax base is regularly a significant part of our taxation proposals.”

Corporate sector of the country – led by OICCI – strongly opposes amnesty schemes from governments whether they are about any particular sector or the general economy. Such fierce opposition to amnesty schemes are seldom seen from other trade bodies of the country.

When the Nawaz government took back or amended the tax measures for the documentation of the economy that it introduced in the Finance Act 2013, the corporate sector registered a strong protest and said that it was unfair with the documented businesses.

Moreover, the sector also protested on the announcement of the amnesty scheme that this government introduced in December 2013, for two and half years from January 2014 to mid 2016.

Published in The Express Tribune, May 28^th, 2014.

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