LCCI For Business-friendly Upcoming Federal Budget

LCCI for business-friendly upcoming federal budget

LAHORE, (UrduPoint / Pakistan Point News - 22nd Feb, 2021 ) :Lahore Chamber of Commerce and Industry (LCCI) on Monday called for a business-friendly upcoming budget and said that the Federal Budget 2021-22 has become the most important document in the context of COVID-19 which had shattered the basis of economy.

Talking to a group of businessmen here, LCCI President Mian Tariq Misbah, Senior Vice President Nasir Hameed Khan and Vice President Tahir Manzoor Chaudhry said that federal budget was the most important document for any country as it set economic directions for the entire year. "It is important that budget for FY 2021-22 should have doable suggestions of business community in its fold," LCCI President added.

Lahore Chamber's office-bearers said that Pakistan was energy and water starved country and needed to make substantial investment for the development of power sector infrastructure that was capable of meeting the growing needs of the economy. They said the government should ensure substantial amount of public investment first into transmission and distribution infrastructure.

The LCCI office-bearers said that to tackle circular debt on sustainable basis ultimately Pakistan would have to ensure that the electricity power sector was efficient and competitive. This would require consistent structural and institutional reforms. In particular, removing subsidies and adherence to full cost recovery would have to be ensured. They said that tariffs should fully reflect normal profits. The sector's large debt overhang also needed to be eliminated on sustainable basis.

They said that in view of the substantial and untapped potential of alternative sources of energy, sufficient funds should be dedicated to the development of bio-fuels, bio-mass and other renewable sources of energy.

The technology was already available to produce energy by various resources such as Jatropha etc. They said that Jatropha was already being used to produce bio-diesel in a number of countries such as India, Brazil, Philippines, etc. They said that these plants could be easily grown on poor quality, waste or arid land which was abundantly available in various parts of the country such as Cholistan. They further stated that bio-mass including wood, dung, agriculture residues which was available at a very low cost in Pakistan could also be used for energy purposes.

The LCCI office-bearers said that special attention should be given on hydel power projects to produce cheap electricity. They said that Kalabagh Dam should not be sacrificed to the political will of some elements.

It was not just a project, they observed, it was a fate changer. He said that one million acre feet of water gave benefit $ 2 billions annually to the economy while Pakistan was throwing over 35 millions acre feet of water to the sea because of delay in construction of Kalabagh Dam thus wasting US $ 70 billion annually. He said that Kalabagh Dam should be announced in the forthcoming budget.

About taxation, the LCCI President said that neither the existing system was economically neutral, taxpayer friendly, equitable, progressive nor facilitative and supportive to generate healthy business activities for all. Taxation was an important source of revenue collection but tax policies must be based on the best international practices and universally accepted system of taxation, he added.

They cited that distortion in the existing tax policies could be removed if the feedback of all the representatives of business organizations was given due consideration by the FBR authorities.

It was universally admitted fact that public policy makers could make noticeable difference by linking their mindset to ground realities, they said and added that number of taxes and frequency of paying taxes must be reduced.

About CPEC, they said that projects like this had potential to stimulate local economy by increasing the demand of locally manufactured goods. Such increase in demand would not only allow full utilization of existing manufacturing capacity but also encourage manufacturers to increase their capacity.

The LCCI office-bearers said that business community had serious reservations with regard to current performance of FBR for disbursing refund cases of Sales Tax and Income Tax. The exporters were suffering the most because they were facing serious issues of shortage of working capital.

They urged the government to take steps to control smuggling at the borders and Frontier Constabulary deployed there should be equipped with state of the art technology and made them more vigilant and to advise them to play their role in controlling the smuggling by exercising their authority. They suggested that duties on such goods which were prone to smuggling should be reduced as it had been practiced successfully in many other countries.

They said that Pakistan needed a Long Term Integrated Export Strategy, adding that removal of businessclimate challenges could help considerably in this regard.