ISLAMABAD:The experts at a roundtable on Tuesday urged the government to cut down on the prevailing high energy tariffs and find less energy intensive export resources alongwith developing human resource base and enhancing public-private partnerships; introducing tax reforms, and create a conducive environment for attracting investment.
The Islamabad Policy Research Institute (IPRI), in collaboration with Karachi School of Business and Leadership (KSBL), organised a roundtable on “Building a Resilient Economy: Analysing Budget 2023-2024” in Karachi on Thursday, and was participated by Dr. Ahmad Junaid, Rector & Dean, KSBL, Ejaz Muhammad, CEO, Arif Habib Dolmen REIT Management Limited, Ghias Khan, President & CEO, Engro Corporation, Syed Mohammad Shabbar Zaidi, Former Chairman Federal Board of Revenue, Asif Jooma, CEO, Lucky Core Industries Ltd., Asad Ali Shah, CEO, Asad Ali Shah Associates, Khawaja Bilal Hussain, SVP Strategy, Business Development and Sustainability, Engro Corporation, Imran Baxamoosa, CEO Blue-Ex, SahibzadiMahin Khan, Founder & President Women Chamber of Commerce and Industry Korangi, Sayem Ali, Chief Economist, The Bank of Punjab, Dr. Safia Minhaj, Professor, University of Karachi, Mr. HuzefaMazahir Ali, Partner EY and Amb. Dr. Raza Muhammad, President IPRI, a news release said.
The roundtable was moderated by Dr. Aneel Salman, Chair Economic Security at Islamabad Policy Research Institute, and Aijaz Haq, Head of Growth and External Linkages, KSBL. The theme of discussion revolved over economic health of the country as they closely scrutinised the budget for the fiscal year 2023-24.
The experts were forthcoming in presenting their valued input, and called upon for drastic measures to stem the current rot, and fix the economy on sustainable lines.
The focus of interaction was on themes such as impact of budgetary provisions for corporate sector; financial viability of state; roadmap for economic recovery; taxation for growth; and challenges faced by women entrepreneurs in Pakistan.
The roundtable was candid in highlighting some of the merits of the annual budget, 2023-2024, and pointed them the government has come up with efforts to promote growth of the IT sector and IT-enabled services, which is a good omen as it is an export driven measure. They noted that the budget exempts taxes on imports of IT equipment by exporters, and aims to facilitate the expansion of the IT industry by fostering technological advancements.
The panel stated that duty exemptions on solar equipment is an attempt to encourage the adoption of renewable energy sources, and sustainable practices in the energy sector.
The budget imposes a 10% final tax on the issuance of bonus shares, potentially discouraging companies from offering such shares. This measure may reduce market trade volume and negatively affect the Pakistan Stock Exchange.
It was pointed out that the set targets for tax collection (PKR 9.2 trillion) and revenue growth by 39% are not realistic, and appear to be impractical. Similarly, the resolve to increase salaries and pensions will additionally exert strain on the fiscal deficit. The reason is that the budget has enhanced the tax burden on the already compliant formal sectors and salaried class, which will discourage productive human capital, and limit capital formation and growth-oriented initiatives in the manufacturing sector.
The roundtable promptly identified the pestering problems in economy and budget, and elucidated by saying that the problem of Pakistan is an excessively large government. It said that the total expenditures are currently 14.4 trillion, 50% higher than the original FY 23, which makes it a difficult provision to manage the balance between expenditure and income.
They noted that corporate tax of 29% is hindering businesses in expanding their operations, and imposition of Super tax is no less than an enigma.