LAHORE - Advisor to PM on Finance and Revenue Dr Abdul Hafeez Shaikh has said the government is taking steps to put economy on the path of sustainable growth and creating employment opportunities for the youth. 

He predicted that the graph of unemployment will decrease sharply in coming days.

“When it came to power the government had to face stiff challenges of high current account deficit and artificially high exchange rate. 

These factors were causing de-industrialization, hampering exports and promoting an import based economy”, he said while talking to a delegation of businessmen led by Lahore Chamber of Commerce and Industry (LCCI), President Mian Tariq Misbah. The delegation consisted of Senior Vice President Nasir Hameed Khan, Vice President Tahir Mazoor Chaudhry, LCCI former presidents Mian Misbah-Ur-Rehman, Mian Muhammad Ali, Abdul Basit, Irfan Iqbal Sheikh, Farooq Iftikhar, Almas Hyder, Shahid Hassan Sheikh, Tahir Javed Malik and Sohail Lashari.

Hafeez Shiekh said the government is focusing on enhancing exports and it is in this context, duties on numerous raw materials have been reduced and energy has been provided at subsidized rates to export sectors.

He said the government is committed to solve the problem of refunds on permanent basis and a lot of improvements have been made in this regard. Through the new Refund system (Faster Plus), the private sector would be able to track the progress on their refunds. 

If there is a slight delay, the online system would apprise the particular business entity about the reason of delay. Hafeez Sheikh said the government is also working on reducing expenditures. After many years, the primary deficit has turned into a surplus.

He said the COVID-19 has adversely impacted the tax collection of federal government. 

Despite financial difficulties, the government facilitated the businesses in COVID-19 scenario by introducing different schemes for deferring principle payments, loans for salaries, relaxation in energy bills for small businesses and tax breaks for the construction sector, adding that Ehsaas Programmne has been started to give low cost loans to young entrepreneurs.

He said the government has allowed the import of wheat in order to avoid any scenario of food shortage. A comprehensive package is given to utility stores for essential food items.

Hafeez Sheikh said SME Policy is being formulated by the Ministry of Industries. Income Tax Refunds up to Rs 50 million are being paid, adding the government is ready to bring the other potential sectors like halal food, pharmaceutical etc in the same facilitation regime as the five other zero rated export oriented sectors.

Governor Punjab Chaudhry Muhammad Sarwar said government gives extra importance to private sector and is striving hard to keep a close liaison with private sector as they are the main source of wealth creation and employment generation. He said the present government has worked hard to reduce the current account deficit from 20 billion dollars to 3 billion dollars.  The construction industry has started to pick up due to the recent incentive package by the Prime Minister.  Government is committed on reducing the energy cost for private sector by focusing on solar energy. Mian Tariq Misbah said the energy cost for all the export sectors needs to be reduced. 

The availability of gas for industry should be ensured 24/7. Small traders have suffered a lot after COVID outbreak. 

The government should give interest free loans to the small traders. The government should also have a dialogue with small traders to know more about their problems. 

He said the interest rates should be reduced further in line with the regional economies in which the interest rates are much lower, adding the FBR has recently issued SRO 889 regarding the installation of surveillance cameras at factory premises to monitor production of goods in various sectors. It will not serve the purpose of enhancing tax revenues and will create an environment of undue harassment. 

Hence the implementation of this SRO be deferred and a better mechanism be put in place in consultation with the stakeholders.

He said the incentives which are currently provided to the five zero rated sectors should also be provided to all the export oriented sectors of the economy such as  rice, halal meat and pharmaceutical.

The FBR has started imposing heavy fines on retailers/chain stores on non-implementation of POS system. 

The government must take the private sector in confidence before taking such punitive measures and address their apprehensions, adding FBR has granted 17% Sales Tax exemption and 2% Withholding Tax exemption to foam manufacturers based in Federal/Provincial Administered Tribal Areas (FATA/PATA) on imports of certain raw materials. 

These materials are imported and sold in other parts of country at cheaper rates. It is seriously hurting the regular foam manufacturers in other parts of the country. This matter requires immediate attention.

He said the government must strengthen the price control mechanism and take all possible measures on priority to strictly control the price hike especially of essential food items. He said due to continuous price fluctuation of paper & paperboard, the private sector is facing many issues.

He said to flourish the marble sector, government should declare its status as ‘Industry’, adding that government should announce Lithium-ion Battery Policy and allow duty-free and tax-free import of all type of raw material used in producing Lithium-ion batteries in Pakistan.