LAHORE - Federal Finance Minister Asad Umer has said that talks with the International Monetary Fund (IMF) are at final stage to acquire loan, saying that the volume of loan is not the major issue rather the actual problem is the terms and conditions of the donor, which could be very harsh.

He was talking to the media at the Lahore Chamber of Commerce & Industry. He pledged to make clubbing of taxes in the federal budget to facilitate the businessmen who were paying a large number of taxes.

Asad Umer said that business community would be given the facility of single tax collector in the coming federal budget. He said that trust building between government and business community is need of the hour as private sector will be leading economy in the 21st century while government would act as facilitator. He said that FBR and private sector would have to give honor to each other for trust building. He said that promissory notes for industrial sector was the idea of private sector and it will help resolve the issue of liquidity. He said that cabinet will approve finance bill soon.

To a question, he said that interest rate is the matter of central bank saying that savings are a must for sustainable economic development. Last year, savings were only 10.4 per cent that were very low. These should be 25 to 28 per cent to achieve the annual growth target of 7 per cent. State Bank of Pakistan would have to maintain a balance. He said that industries are provincial subject after 18th amendment. Federal and Provincial government would take stakeholders on board to get their valuable feedback. He said that Special Economic Zones are of utmost importance. He said that Privatization commission has been asked to work with full throttle for loss making public sector enterprises. He said that 11-member board has been formed for “Sarmaya Pakistan” that would have 8 representatives from private sector while remaining will be from the government.

The federal minister earlier addressing at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) expressed the resolve to simplify the taxation system to facilitate the taxpayers especially the business community at large.

Federal Finance Minister appreciated the FPCCI’s idea of establishing Cottage Industrial Estate and said that he would recommend it, while the relevant provincial government would also be taken on board. Small industrial units played pivotal role in the creation of new employment opportunities as well as work as a proven catalyst for the economic development of the country, he opined.

The UBG chairman and veteran traders leader Iftikhar Malik, while addressing the meeting, said that measures announced in the Reform Package were realistic and growth-oriented with emphasis on growth in exports and revival of economy. “The thrust of this bill is to alter the direction of the economy from trading and services to industry and manufacturing with a focus on ease of doing business in the country,” he added. He also expressed his gratitude and thanked the finance minister for incorporating most of the FPCCI proposals, which had since long been advocated by it.

Iftikhar Malik observed that the services sector is the main driver of economic growth in Pakistan with a contribution of 60 percent in the GDP. To enable the services sector to realize its potential in terms of exports, it should be incentivized and included in the priority sectors in the “Trade Related Investment Policy Framework 2015-2023” for export oriented investments.

LCCI President Almas Hyder said that the benefit of the payment of refunds through promissory note should also be extended to all the other sectors in addition to five zero rated sectors. He called for elimination of regulatory duties (RD) on all the raw material lines to reduce the cost of doing business and making manufacturing competitive. He said that government should take steps to reduce the interest rate. The recent hike in the SBP policy rate to 10 percent (highest in five years) has made borrowing highly expensive for private sector and discourages investment that needs debt financing. The government should rezone urban centres, demarcate industrial land and set up SEZs all over Pakistan.

Federal Minister of State for Revenue Hammad Azhar said that Standard Operating Procedures (SOPs) are being evolved for issuance of tax exemption certificates. He said that raids at business premises have been ceased and SOPs are being formed in this regard as well. He said that Tax Reforms Implementation Committee is active while tax policy and tax administration are being separated.

Chairman Federal Board of Revenue Dr Jahanzeb Khan said that FBR reforms are one of the top priorities of the government for trust building. Provincial Minister Mian Aslam Iqbal said that draft of industrial policy has been approved by the cabinet. Work on Quaid-e-Azam Apparel Park on 1500 acres and Special Economic Zones is well on the way.