KARACHI: Businessmen have estimated around $5 billion new investment alone in industrial sector under a package recently announced by Prime Minister Imran Khan.
The Chairman of FPCCI’s ruling group of BMP Mian Anjum Nisar observed that the new ordinance has amended the Income Tax Ordinance 2001 to extend the promotion package for industry and encourage entrepreneurs to invest in industrial undertakings out of their undisclosed assets.
“We salute the PM Imran Khan and appreciate the efforts of his whole team, especially Finance Minister Shaukat Tarin, Federal Industries Minister Khusro Bakhtiar, PM Advisor Razaq Dawood, Secretary Industries Jawwad Rafique and Joint Secretary Hamid Atique for launching the game-changing and SME-inclusive industrial growth package, which was promulgated through presidential ordinance,” he added.
FPCCI newly-elected president and managing committee chairman Irfan Iqbal Sheikh added that tax incentives, especially for those with documented funds, are important to attract investors. But these alone will not do the trick.
The government should also undertake legal, regulatory and energy reforms, and cut the bureaucratic red tape to make manufacturers and exporters competitive in international markets, he suggested, adding that Pakistan has grown its overseas sales in the last couple of years but its dependence on low-value-added textiles and lack of market diversification means that its imports have far outpaced its exports.
Mian Anjum, who is also FPCCI former president, observed that the entire business, industrial and trade community of Pakistan join hands to acknowledge and appreciate the Prime Minister Imran Khan on the announcement of truly historical, inclusive, facilitative and redefining industrial growth package, with a special silver lining for the micro, small and medium enterprises (MSMEs)-the real engine of growth and employment generation in any economy.
He maintained that the package of tax incentives would push industrialization in the country and strengthen efforts to support private capital investment in the manufacturing businesses.
The real appreciating point of the package is that the business community was taken onboard in the whole process and FPCCI’s all suggestions were incorporated in the industrial package, he said.
The LCCI President and PIAF Chairman Mian Nauman Kabir said that narrow and inadequate industrialization is one of the major reasons for Pakistan’s low exports and, consequently, the repeated currency crises that the economy has endured over the last several decades after brief periods of economic boom. He said that no country could advance economically, generate jobs and alleviate poverty without boosting and diversifying industrial productivity. Little wonder Pakistan has sought 12 bailout packages from the IMF in the last three decades to cope with its recurring balance-of-payment difficulties. The journey to diversified industrialization can be tough and long, and requires consistency in policies and perseverance, he said.
PIAF senior vice chairman Nasir Hameed said that the package is aimed at bolstering investments in new companies, revive closed factories and help existing industrial units expand their production capacities and upgrade their technology. The incentives will be applicable on capital investments of Rs 50 million and above in small to large industrial units.
PIAF vice chairman and Footwear Manufacturers Association former chief Javed Siddiqi said that all local, foreign and overseas Pakistani investors are eligible to benefit from the tax cuts and exemptions if they start production before the end of FY24 what is more important is that no questions will be asked about the source of funds invested in industrial projects, which was the major demand of the industry that was also accepted, leading to attract new investment of up to $5 billion in the country. Resident and non-resident Pakistanis willing to bring back their foreign disclosed and undisclosed assets to the country will get some additional tax benefits, he added. He said that the new amnesty scheme would boost exports and create new jobs, as tax relief would lead to substantial fresh local and foreign capital investment in the months ahead.
The country is facing many financial challenges including the current account deficit, balance of payments gap, swelling imports and foreign loans, however, with concerted efforts and right policies, the country will pass through the tough period, he said.
He said that enhancing manufacturing base was vital to achieve sustainable goals, as the government has introduced long-term policies primarily aimed at sustainable economic growth in the country and to achieve the economic targets.
Highlighting several other incentives announced by the government, he said they would usher the nation towards an industrial revolution, besides increasing export volume. He said that tax collection reached the record level of Rs6 trillion from Rs3.5 trillion, as the government was taking steps to reduce the tax burden on the public and widening the tax net.