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Only double digit tax-to-GDP ratio to lower burden of loans: ICCI President

Only double digit tax-to-GDP ratio to lower burden of loans: ICCI President

ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) President Shaban Khalid said that every company and individual should be registered with Federal Board of Revenue as non-registration is burdening the existing taxpayers.

The ICCI president, during an exclusive interview with Customs Today, said that culture of tax evasion is increasing in the country and small & medium entrepreneurs are suffering badly.

“This is a fact that small and medium entrepreneurs play a significant role in uplifting of trade as almost 90% of the businessmen belong to small and medium industries”, he added.

Shaban Khalid pointed out that most of the businessmen do not pay taxes, which is the main cause of low tax-to-GDP ratio, adding that mostly salaried class pay taxes regularly. He revealed that amongst the population of 180 million, only 1.9 million people pay taxes and almost one million more people should be added into the tax net.

There is another fact that tax-to-GDP ratio should be in double digits and the present government is focusing to enhance it from 8% to 13%, he added.

Talking about the amnesty scheme of cars, he said that the scheme was misused and those cars that were not even brought into the country were benefited through this scheme, adding that most of the stolen cars were also included in the amnesty scheme.

The ICCI president said that loadshedding and poor law & order situation are the main hurdles in the way of bringing investment in Pakistan. “Law and order situation should be improved to attract foreign investors,” he said, adding that the procedure of bringing investment in the country should be simplified and foreign potential investors should not be lost by red tapes.

To enhance foreign investment, ICCI President Shaban Khalid said, “We should invite foreign investors in Pakistan and introduce them with better opportunities available here. There is an urgent need to present our country’s image in a better way in the world so that the investors feel secure in investing here.”

He said the ICCI is struggling to encourage and facilitate local investors. For promoting business activities in Pakistan, the project of Gwadar Port should immediately be completed.

“We have a lot of natural resources like coal and have proper irrigation system but unfortunately we are not using it in an effective way. We have good quality mangoes, citrus products and water melon but these products are being ignored. We are not meeting quality and hygiene standards and no work is being done in this regard. We can produce Halal meat and dairy products but we are doing nothing in this field. No research work is being carried out in livestock and the government is only focusing on textile industry,” he regretted.

The ICCI president stated that the nuclear agreement between Iran and other world powers will be very fruitful for the promotion of trade in this region and this pact definitely help enhance Pakistan’s trade. He said it is a reality that throughout the world, trade sector is always facilitated and resources are always provided by governments for the business sector but this is the most difficult time for business community in Pakistan.

He pointed out that overseas Pakistanis are a great asset of the country and many of them are eager to invest in Pakistan, but red tape, patwari culture and other factors are holding them back from investing in Pakistan. He suggested that the government should establish one-window facility in each province as well as the local chambers of commerce for overseas Pakistanis to facilitate them in making investments easily. He said that overseas Pakistanis have reportedly sent an amount of $55.01 billion from the financial year 2008-09 to 2012-13, which shows their huge potential to invest in the country.

Lauding the Prime Minister’s incentive package for business community, he said that with good policies and lucrative incentives, the government can attract investors and Pakistan can achieve highly beneficial results for its economy.

Shaban Khalid urged the government to set a practical example by establishing the one-window facility which should be manned by people equipped with new ideas, progressive mindset and latest technology, adding that they should be empowered to identify those who create hurdles for investors and report about them directly to the highest level of authority so that problem creators are dealt with iron hands. He said the Chief Ministers’ offices and preferably the Prime Minister’s office should directly monitor the performance of one-window facilities to ensure that the best quality services are provided to overseas Pakistani investors.

Shaban said that acquisition of land for investment, especially by overseas Pakistanis is a cumbersome process in Pakistan and the government should work on making land acquisition for individuals easier to woo more investment. The government should also establish special courts for overseas Pakistani investors to provide them speedy justice in business disputes as justice delayed is justice denied, he suggested, adding, “The highest authority in judiciary should oversee the working of such courts to ensure that cases are decided fairly and timely to facilitate the investors.”

The ICCI president said that Pakistan has seen hefty decline in foreign investment due to many factors. However, he was of the view that wooing investment from overseas Pakistanis through different incentives and facilitative measures would boost FDI in the country and become a tool to revitalise industry for creating more jobs and improving tax revenue. It will be a win-win arrangement both for overseas Pakistani investors and the country, he concluded.