LCCI suggests measures to attract foreign investment
LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has welcomed the remarkable rise in the businessmen and foreign investors’ confidence in Pakistan’s economy and called to keep the momentum going.
“[The] overall Business Confidence Score in Pakistan now stands at positive 9 per cent, which is a very good news for the economy,” LCCI president Mian Tariq Misbah said, adding that according to a survey, a phenomenal increase has been recorded in the confidence of entrepreneurs, companies and foreign investors in the economy of Pakistan.
Besides the LCCI president, other office-bearers, including senior vice president Muhammad Nasir Hameed Khan and vice president Tahir Manzoor Chaudhry said that a record improvement of 59 per cent from the previous negative 50 per cent is an ample proof of the fact that the government had adopted prudent monetary and fiscal policies, despite the Covid-19 challenge.
The LCCI office-bearers said that the achievement is good and encouraging but still a lot of room is available for further improvement at the economic front.
The Lahore Chamber of Commerce and Industry had always played an instrumental role for the promotion of trade, industry and the national economy, they said.
Some more steps will help increase the confidence of the business community and can attract foreign investment, the LCCI office-bearers said, adding that, in this regard, the Lahore Chamber has presented a set of proposals to Prime Minister Imran Khan and the relevant departments in which, it has been demanded that the government should take notice of the new clause 203 through which exorbitant powers have been given to the tax authorities to arrest and prosecute the business community.
The LCCI office-bearers said the government has withdrawn the facility of reduced rate of sales tax (10 per cent) on the import of the pharmaceutical plant, machinery, HVAC equipment and capital goods. This would hamper the competitiveness of the pharma sector.
This facility should be restored, the LCCI office-bearers said, adding that exorbitant fines have been imposed on the importers under section (28) 156 in the Federal Budget 2021/22 for failing to complete the paperwork for redemption of their shipments.
They stressed the government to declare pharmaceutical and engineering sectors completely zero-rated. This step will play a significant role in further enhancing exports.
The LCCI office-bearers said the system of centralised automated refund system should be made fully functional, adding that in addition to the sales tax refunds, income tax refunds should also be paid through this system to facilitate the business community.
There is a great need to improve infrastructure as far as testing laboratories and Standard Certification is concerned, they said, adding that substantial allocation from the Public Sector Development Programme (PSDP) and EDF Funding can be utilised to establish state-of-the-art testing laboratories on the outskirts of major cities.
The government has reduced import duties on many raw materials in the last couple of years and also in the current budget. This process should continue for all remaining raw materials, which are not manufactured locally, and should be declared zero-rated.
The LCCI office-bearers said the cost of land for the business community in the industrial estates has reached exorbitantly high levels and needs a simple lease policy.
The rate of 17 per cent sales tax on the inputs of various export-oriented industries is extremely high and needs to be brought down. The interest rate should be reduced further from 7 per cent to 5 per cent in line with the regional economies.
The regional interest rates are (India 4 per cent, Bangladesh 4.75 per cent, China 3.85 per cent, and Sri Lanka 4.5 per cent).
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