LAHORE   -   The Lahore Chamber of Commerce and Industry (LCCI) hosted a pivotal consultative session on the formulation of the National Industrial Policy (NIP) here on Sunday.

Chairing the session, LCCI President Kashif Anwar said that the current policies are designed for those who are in the tax net and for documented industries. He emphasised that policies should be made to expand the tax base and support the industrial sector. He mentioned that SRO 1842, SRO 350 and the Income Tax Amendment Act 2024 are making the business environment more difficult.

He elaborated on the process of petitioner assessment that if assessment by assessing officer exceeds Rs20 million, the petitioner has to go to the tribunal for remedy. If the tribunal also decides against the petitioner, the next forum is the high court, and for the assessment below Rs20 million, the next forum for remedy is commissioner appeal and then high court. In high court, for attaining stay, the petitioner has to deposit 30 percent value of the assessed amount for seeking stay which will create cash flow problems and other difficulties for the tax payers.

He mentioned that according to SRO 350 if the previous supplier will not submit his sales tax return the subsequent sales tax return to claim input tax will not be submitted. He noted that importing machinery at 25 to 26 percent raises costs, and other obligations like EOBI, LDA, and payment for industries to use highways adds to the burden. He emphasised on the need for a thorough examination of these policies to support the industrial sector effectively.

Consultant for REMIT Usman Khan delivered an in-depth presentation addressing Pakistan’s persistent growth challenges. He highlighted the inconsistencies and unsustainable nature of current growth trends, emphasising the necessity of enabling factors for robust industrial development. He discussed the lack of export diversification, identifying new potential export products, and the unrealised export potential, while also pinpointing sectors with high growth potential.

He outlined several well-known issues impeding industrial growth, including volatile macroeconomic conditions, political instability, exchange rate variability, and the high cost of capital exceeding 22 percent with limited alternative options. He also addressed the overly regulated economy and competition hindered by cartelisation, lack of corporatisation, factor costs and availability, and policy inconsistency which was also highlighted by the LCCI president in his initial remarks.

Highlighting the resurgence of Industrial Policy (IP) as a crucial instrument for fostering growth and job creation, he pointed to global examples from the US, EU, UK, Japan, and India, all of which are implementing active IPs. He discussed contemporary challenges and opportunities such as the US-China Trade War, the EU Green Deal, climate change and disaster resilience, and the imperative of investment and exports for job creation. Several pivotal questions were also deliberated, including how to leverage the US-China trade war to enhance exports, addressing spatial disparities and developing cities like Hyderabad, reforming the banking sector, enhancing competition and reducing elite capture, exploring technology-led joint ventures with potential partner countries, and reducing the government’s footprint in the economy.

He concluded with a proposed way forward, which involves conducting comprehensive analysis and stakeholder consultations, identifying 1-2 representatives from each chamber, and bringing stakeholders together for debate and policy finalisation. The consultative session underscored the importance of collaborative efforts in formulating a robust National Industrial Policy aimed at sustainable economic growth and job creation.