The president’s forum also called for significant cuts in import duties, tax breaks
Representational pictures. PHOTOS: REUTERS
LAHORE: The All Pakistan Business Forum has urged the central bank to announce soft loans with a maximum rate of 3% increase, especially for SMEs to save their struggling businesses.
The forum expressed concern over an insufficient cut of only 1% in the main policy rate to 8%, in a statement issued Saturday. APBF President Syed Maaz Mahmood also expressed dissatisfaction with the financial package announced by the government for the industry to face the challenges posed by coronaviruses. He called for significant cuts in import duties and waiver of sales tax, income tax and additional income tax, which were still imposed at the time of this serious crisis.
Mahmood called on the government to take concrete steps to keep the wheels of industry running especially for SMEs, to save the livelihoods of millions of workers associated with small industries.
The President observed that mere statements would not function unless firm steps were taken by the government including a substantial reduction in fuel prices, lowering the key policy rate to 3%, regionally competitive energy levels and a substantial reduction in duties and taxes or complete neglect at least in this critical situation.
Mahmood further criticized the port terminal and shipping lane authorities for rejecting the government’s recommendation to relax detention costs, in addition to extending the terminal’s free period for charging demurrages due to business closures, amidst prolonged locking in the country.
APBF National Council member and CHT Pakistan’s Managing Director Haroon Ali Khan observed that the biggest challenge now is cash flow management.
“We must remain focused on support for cash flow management for the SME sector and the government can prioritize its incentive preferences under growth and the importance of the economy,” he added. He suggested that the authorities reduce sales tax from 17% to at least 10% to increase demand, in addition to announcing an interest-free loan to pay employee salaries.
APBF Chairman Ibrahim Qureshi said that to save the economy from the impact of the slowdown caused by Covid-19, the government had to announce special incentives for small and medium cash-strapped industries, which represented more than 90% of around 3.2 million company businesses in Pakistan, contributing 40 % of GDP, employs more than 80% of non-agricultural labor, and generates 25% of export income.
Published in The Express Tribune, May 17th, 2020.