KARACHI: Pakistan Business Council (PBC) has urged the new prime minister of Pakistan Shahbaz Sharif don’t allow the country to experience the kind of challenges confronting Sri Lanka.
The PBC in a letter congratulated the Prime Minister and assured him of full support in tackling the challenges facing the economy.
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The PBC recommended the new prime minister to stem the pressure on foreign exchange reserves by reducing imports. “Don’t allow the country to experience the kind of challenges confronting Sri Lanka,” it said. In order the discourage imports, the PBC recommended raising regulatory duty on import of non-essentials. Further, as regulatory duty is impractical on fuel imports, limit import through conservation measures: work from home, early closure of commercial centers and wedding halls; rationing of fuel private vehicles.
There are several very critical choices that your government needs to make in the next few days. Foremost amongst these is restoring fiscal prudence, stemming the pressure on the foreign exchange reserves and reviving the IMF programme. In the attached summary we have listed the immediate economic imperatives and offered our suggestions on the way forward.
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The PBC urged the prime minister to restore fiscal prudence by withdrawal of general subsidy on fuel. “Replace with targeted assistance through BISP,” it recommended. The council suggested to avoid further populist measures that also result in increasing the inflation.
The PCB recommended equitable taxation and urged the prime minister for avoiding burdening existing taxpayers further. “Avoid knee-jerk revenue seeking measures that impact the long term health of the economy,” it added.
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The PBC suggested to accelerate Federal Board of Revenue (FBR) reforms to broaden the tax base, pending which, increase the advance and withholding tax rates on non-filers.
Review anomalies that arose from hasty changes to meet the claimed demands of the IMF: Multiple taxation of inter-corporate dividends and other anomalies in group taxation; tax credits for investment; and other exemptions that still had time to run.
It is further suggested to phase down the inequitable minimum and advance taxes on the formal sector which raise the cost of doing business.
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