Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Monday that the policy of promoting consumerism in the country without expanding the industrial sector has caused irreparable damage to the economy. He said this policy did not benefit the local industries but the industrial sector of other countries with Pakistan’s resources.
Mian Zahid Hussain said that the relentless imports of luxury goods, manufactured goods, and luxury vehicles are examples of this.
Talking to the business community, the veteran business leader said it is necessary to prioritise the industry over trading and real-estate sectors while creating a practical and feasible policy to increase the tax base because Pakistan still needs to collect Rs4000 billion more in taxes.
Pakistan can widen the tax base and enhance collections, for which a plan is needed to relieve the country of its unbearable deficit. He added that enhanced tax collection can help the government provide relief to the poor and fund developmental as well as mega projects.
The business leader said that Pakistan collected taxes of 7200 billion rupees last year, while 7500 billion rupees were required for debt servicing.
Mian Zahid Hussain said that debts and liabilities have grown beyond manageable limits. The country can no longer repay the loans to the IMF, other international organisations, and CPEC-related loans, and the system is being run on the rollover of loans. The public and private sector is paying the cost of all these factors; business people are not getting loans while the interest rates and prices of petroleum, electricity, gas, and food items are skyrocketing.
Super tax, wealth tax, and withholding tax also hurt the economy. At the same time, the public and private sectors are forced to foot the bill for keeping state-run entities artificially alive for decades.
He said the news of serious investment by the Arab countries and their private sector is hot. SIFC has been established with the support of the Army Chief to provide a one-window facility to foreign investors, which is a source of happiness and hope.
Mian Zahid Hussain said that SIFC is expected to attract an investment of 25 to 30 billion dollars. At the same time, there are reports of restarting the stalled work on CPEC, which will enable further investment, the opening of Special Economic Zones, and the availability of world-class infrastructure, resulting in a two per cent increase in GDP.
He said that such initiatives will stop the flight of capital and brain drain, adding that it is necessary to restore the confidence of the business community and people in the economic policies and the country’s current economic situation.
This will not be easy, but it will be possible for the caretaker PM and his cabinet, who will face difficult choices.
The size of the interim government needs to be kept down, and reviving the economy will require bold and energetic action from the caretaker government and the incoming elected government, he said.