Chairman Businessmen Group (BMG) and Former President KCCI Zubair Motiwala in a statement issued on Thursday expressed deep concerns over the continuous devaluation of Pakistani rupees against the dollar which after surpassing Rs175 level was still hovering above Rs170.
He urged the government that it was high time the State Bank, being the regulator, must intervene to stop the further freefall of PKR and devise some kind of an effective mechanism for appreciating the value of the Pakistani rupee to such an extent that the dollar reverses back to its previous level of Rs150 with a view to reducing the impact of inflation on the common man.
“On the other hand, the Federal Board of Revenue (FBR), which has been taking advantage of higher dollar value, must also be directed to either bring down taxes and duties or keep them charging at the same rate but the calculation for taxes and duties must be done as per dollar rate of June 2021 when the budget was announced and the dollar at that point in time stood at around Rs150 instead of current rate which would certainly help in controlling the inflation”, he added while speaking at a meeting held during the visit of a delegation from All Pakistan Motorcycle Spare Parts Importers & Dealers Association (APMSPIDA) which was led by Rehan Hanif.
Vice Chairman BMG Anjum Nisar, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Vice President Qazi Zahid Hussain, Patron-in-Chief APMSPIDA Faisal Khalil, Former Presidents KCCI Majyd Aziz, Haroon Agar, Abdullah Zaki, Iftikhar Vohra, Younus Muhammad Bashir, Shamim Ahmed Firpo, Shariq Vohra and others attended the meeting.
Chairman BMG pointed out that at the time when Federal Budget for current fiscal year 2021-22 was announced in June 2021, the US dollar stood at Rs155 and all the duties and taxes were estimated as per the then dollar rate. As the dollar after surpassing Rs175 level was still hovering above Rs170, it means that the duties and taxes have also risen sharply, which was the core reason behind fostering the inflation.
He explained that out of the total differential amount of more than Rs15 as the dollar still hovers above Rs170 as compared to the previous rate of Rs155 in June 2021, at least 40 percent of the said differential amount i.e., Rs6 on each dollar was silently being collected by FBR in shape of taxes and duties which was highly unfair as it adds to the cost imported goods and escalates inflation.
He was of the opinion that a target of Rs5800 billion was set for revenue collection for FY 2021-22 at a time when dollar rate stood at Rs155 hence, the extra money being collected nowadays due to sharp rise in dollar rate must not be considered as an achievement by FBR but as penalty on masses and the business community as it was the FBR which has been playing a major role in fostering the inflation and overburdening the economy.
Zubair Motiwala said that due to rising dollar rate, high cost of doing business, frequent gas outages, deteriorating infrastructure and other civic issues along with a drastic decline in purchasing power, the local industries have been suffering terribly and facing a severe liquidity crunch which has resulted in limited business activities and it was really unfortunate that the government was not coming up with any workable solution for dealing with all these issues.
Speaking on the occasion, Vice Chairman BMG Anjum Nisar, while expressing deep concerns over deteriorating economic indicators, stated that economic uncertainty has killed the total business environment, leaving the survival of many businesses at stake in the ongoing era of the highest ever inflation. “Currency, which is considered as a barometer of any economy, cannot be allowed to fall freely as it creates a lot of problems not only for the businesses but also for the economy and the common man”, he added.
President KCCI Muhammad Idrees said that devaluation of rupees against the dollar and widening trade account deficit if not promptly addressed would create a nightmarish situation not only for the economy and businesses but also for the common man whose purchasing power has descended sharply nowadays and was hardly in a position to ensure bread and butter for his family. “Dollar rate which impacts prices of almost all the household items and raw material has to be controlled by SBP otherwise, the businesses will not be able to stay afloat due to high cost of doing business, unemployment would rise and the situation may trigger even unrest”, he added.
Leader of APMSPIDA delegation Rehan Hanif, in his remarks, pointed out that importers and dealers of motorcycle spare parts have been facing a lot of problems as motorcycle spare parts remain in the 3rd Schedule list, making it mandatory to put MRP (Retail Price) including GST on motorcycle spare parts at import stage before shipment which was not possible keeping in view the diverse range of hundreds and thousands of spare parts. Moreover, it was a well-known fact that sales of imported spare parts are made all over the country and the freight charges cannot be the same for every city while the fluctuation in exchange rates was also an issue hence it was impossible to calculate MRP in such a varying situation, he added.