In a statement issued here, LCCI President Irfan Qaiser Sheikh said that almost 70 per cent of the total taxes collected in Pakistan are indirect taxes while the direct taxes are not more than 30 percent that is totally against the practice in advance economies where the ratio of direct taxes in 70 per cent and remaining are indirect taxes.
Elaborating the point, the LCCI President said that direct taxes mean taxes on the Rich Class and on incomes and relief to the poor while the indirect taxes are hitting the general public hard. He said that the indirect taxes like levies and taxes on petroleum products and taxes on electricity and gas bills are not only jacking up the inflation but also coming in the way of long standing business community demand of cut in interest rates in line with regional mark-up rates.
The LCCI President also called for focus on investing in energy solutions and lowering of tariffs on smuggling prone items in the forthcoming budget to achieve key economic targets set for the year 2012-13. In order to tackle energy shortages, the LCCI president said, the government would have to allocate maximum funds for construction of dams/water reservoirs, tapping of Thar Coal, completion of Iran-Pakistan gas pipeline and establishment of LNG terminals.
He said that sufficient funds should be allocated in the forthcoming budget for Dasu power project, Diamer Bhasha dam, Munda dam, Gomal Zam, Satpara power project and Kurram Tungi dam. He said that at least Rs. 200 billion or 10% of the total budget should be allocated for hydel power projects. Irfan Qaiser Sheikh said that the country’s reliance on costly thermal power is jacking up the cost of production and import bill.
The country needs an urgent shift in its energy-mix in favor of hydle power and local fuels. He said that the 175 billion tons of Thar coal reserves with a price tag of $ 13 trillion in the international market, are enough to provide 100,000 MW of electricity for 100 years. Uninterrupted and affordable power supplies can turn Pakistan into an economic powerhouse.
He also hoped that the government would earmark funds for the early completion of Iran-Pakistan gas pipeline and LNG terminals to keep the industrial wheel running especially in Punjab that has borne the brunt of recent suspension of gas supplies to industry in the country. Rising risk perception about investing into Pakistan is hitting hard the FDI that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving Chambers of Commerce in the country. He feared that the fall in Foreign Direct Investment was likely to affect adversely the country’s economic growth.
Irfan Qaiser Sheikh said that all the developed countries accord special importance to economic issues and the challenges. But in Pakistan the situation is the other way round and the economy is on the bottom of government’s to-do list. He said that a number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, textiles and pharmaceutical offer lucrative investment opportunities to foreign investors but unfortunately due to absence required funding for a proper and well tailored marketing strategy these opportunities are unattended even today.