The chairman of the FPCCI Advisory Board and National Business Group Pakistan, the President of Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that it is impossible to do business in the current situation. IPPs are draining the country’s treasury; they receive an annual payment of 2000 billion rupees as a capacity payment, even though the closed factories do not generate electricity.
According to Mian Zahid Hussain, the economy can improve if closed IPPs become operational and industries receive electricity at reasonable rates. The veteran business leader told the business community that setting the industry’s electricity tariff at 25 rupees, or nine cents per unit, could increase exports to six billion dollars. Otherwise, the inability to purchase electricity at Rs 60 per unit will force a record number of businesses to close this year, impacting government revenues and employment. He noted that the system will need to run on loans until business and industry become the most profitable sectors of the nation.
Mian Zahid Hussain said that reforms in the power and energy sectors are urgent. We must revise contracts with IPPs and conduct a forensic audit of all private power projects.
It is necessary to deal immediately with electricity theft, line losses, and bill defaults. The mafia is highly involved in many important matters, such as electricity, the budget, and the tax system, and it will not tolerate any work that contradicts its interests, he observed.
The business leader said that many important institutions in the country are collapsing due to a lack of reforms, while the FBR failed to meet its revenue target in the last financial year.
Mian Zahid Hussain said that the FBR had collected Rs 9.3 trillion against the original target of Rs 9.4 trillion. Top officials are adamant that our system can collect more than Rs 24 trillion.
FBR’s claims to achieve the tax targets are for the revised target, which was Rs 9.252 trillion.
Mian Zahid Hussain stated that improving the FBR system necessitates appointing appropriate individuals, implementing a digital system to record the economy, and prioritising transparency.
However, the lack of concrete steps in this regard is regrettable. Mian Zahid Hussain said that, along with FBR reforms, changes in tax structure are also necessary. Digitising the economy is necessary to succeed in efforts to widen the tax net, as it will increase the tax base, reduce corruption, and create transparency.
Mian Zahid Hussain said that whenever there is a serious attempt to tax agricultural income, the feudal elites end all their political battles and unite. He further said the country is on the verge of bankruptcy, and the IMF is saving it.
Taxes are levied on the salaried class, but the influential sectors are not taxed; therefore, the tax target will not be met even in the current financial year, and the tax-to-GDP ratio will remain low. The increasing burden on taxpayers will seriously affect the economy, leading to further poverty in the country.