Acting President of FPCCI Shabbir Mansha has categorically denounced the imposition of a 10 percent super tax on large industries, which already pay hefty corporate tax of 29 percent and generate millions of jobs in the country as well.
No country in the world can charge 39 percent tax to corporations and still keep the economy afloat, he added. Additionally, new private-sector and foreign investments dry up completely in an uncompetitive market.
Mansha explained that industries affected will include all major industries; namely, cement, steel, sugar, oil & gas, fertilizers, LNG terminals, textiles, banking, automobiles, cigarettes, beverages, chemicals, and airlines – and, these are 13 industries in total. Furthermore, all the remaining industries will be subjected to a 4 percent additional tax.
He also expressed his shock that the federal budget 2022-23 was announced just two weeks ago and it mentioned no super tax on industries. It is a highly abrupt, unfortunate, and anti-industry measure.
Mansha has reiterated FPCCI’s stance that the government should not squeeze the existing taxpayers further and look for the avenues to broaden the tax net; as that is the only practical and sustainable way to generate more taxes without hurting the industries, exports, employment, and the economic growth.
He noted with profound concern that Pakistan Stock Exchange (PSX) was unnerved by the decision and the trading had to be suspended on Friday after the KSE-100 index lost 2,055 points or 4.81 percent in a quick span of merely 20 minutes.
Mansha emphasized that the cost of doing business is already at an all-time high in the country and the interest rate of 13.75 percent will not let the economy grow at any meaningful rate; and, the prices of electricity & gas have already made us uncompetitive as far as the exports are concerned.
Additionally, there are rumors that interest rates may be further raised. He added that the government should also consult with the stakeholders in business, industry, and trade on how and when interest rates can be brought down; so that, businesses can plan their year ahead accordingly.
Mansha emphasized that imposition of PDL – though in a phased manner – will totally destroy the cost of doing business competitiveness and will fuel the inflation like never before through its multiplier effect. He demanded that the government should take the business community on board with its commitment to IMF on PDL.
Acting FPCCI Chief has also stressed the need to start a consultative process with the stakeholders on the implementation status of hike in electricity base tariff; impending PDL imposition and new or additional taxes as these costs will cumulatively destroy the business sentiment and industry will come to a halt.