LAHORE: Federal Minister for Board of Investment Chaudhry Salik Hussain said on Monday that no foreign investment could be attracted without facilitation from the local investors.
He was talking to the business community here at the Lahore Chamber of Commerce and Industry. LCCI President Kashif Anwar and Senior Vice President Chaudhry Zafar Mahmood also spoke.
The federal minister said that before giving priority and protocol to foreign investors, incentives should be given to the local investors first, because if they were happy, only then someone from outside would come to invest here.
He said that situation in Pakistan was that the investors had to go to the public institutions again and again, for one reason or the other. The aim of the institutions should be helping the business community run their businesses and not harassing them. Such an environment should be created here that people could expand their businesses, he suggested.
Chaudhry Salik said that Special Economic Zones (SEZs) were functioning in the same way as Export Processing Zones. The penalties that were being imposed on solar in some societies would be discussed as the whole world were currently investing in renewable energy. He said that chambers should give their opinion on dollar amnesty so that a scheme could be executed to convince those who retained dollars. He said that no political party had an economic manifesto. “First we have to ask ourselves that whenever a party comes to power, do they have any economic policy,” he added.
About the Afghan transit trade, he said that Afghanistan was a landlocked country and the only way was to supply goods there by land route. “We will have to continue the Afghan transit trade, but the taxes should be revisited. I will continue to raise my voice on issues like refunds, taxes, investment of the business community,” he said.
LCCI President Kashif Anwar said, the promotion of foreign investment as well as local investment was need of the hour. According to the Economic Survey of Pakistan, the ratio of total investment in the country was only 15 per cent of GDP, which was quite low. The share of private investment in this was only 10 per cent of GDP, which had become inevitable to increase.
He said, “If we talk about the data of Net Foreign Direct Investment, it was US$2.6 billion in 2019-20, which decreased to US$1.82 billion in 2020-21, while in 2021-22, its volume was limited to only US$1.87 billion, which was also low.
He said that local investment could not increase until the problems of local industries were solved. “For example, our industries have to import a lot of raw materials, essential components and various machinery which are not available in the country, on which they have to pay 100 percent cash margin, regulatory duty, customs duty and additional customs duty, which should be eliminated. Apart from this, the issues of pending refunds and multiple audits should also be cleared and rate of withholding tax for businesses be reduced.”
The LCCI president said that in order to promote local investment, the government had to solve some problems related to taxation on a priority basis, which would also improve the ease of doing business. “Currently, taxpayers have to undergo multiple audits of income tax and sales tax. We appeal that the number of these audits should be reduced. Apart from this, taxpayers have to bear all the audits, penalties, surcharges, bank attachments, inquiries, statements, returns, withholding of registered persons, penalty for late filing of statements/ income tax returns and many other problems.”
He said that current economic conditions require immediate reduction of penalties and surcharges for taxpayers.
The LCCI president said that it was almost impossible to increase investment without reducing the cost of doing business. The industries were facing problems like policy rate which had reached 17 per cent and high energy cost due to which the cost of production increased, and it had become more difficult for exporters to compete in foreign markets. In this regard, there was also a need to work on an emergency basis.
He said that the Board of Investment was working on increasing investment on a priority basis in some sectors including Food Processing, Logistics, Textile, Housing & Construction, Automobile, IT and Tourism. He drew the attention of The minister towards hydropower and renewable energy. He said that the Board of Investment also needed to attract private investment to build new dams and reservoirs. “We should also expand the solar energy network as we still get less than five percent of our energy requirement from it. It will also help in bringing the imports to minimum level,” he suggested.
With the help of Special Economic Zones, the process of industrialisation would be strengthened, but if they were considered as Special Export Zones, it would be very easy to invest in them as well as increase the exports.
Kashif Anwar said that Pakistan had been facing inconsistency of economic policies for a long time due to which new investors were discouraged. For this the Board of Investment also needed to play its role. He said that Lahore Chamber had informed the leaders of almost all major political parties of Pakistan by letters in view of the economic situation of the country that they had formulated some important proposals to fix the current economic situation of the country.
“Government should immediately announce the Declaration Scheme so that the Undeclared Foreign Reserves can become part of our economy. I hope you will support our position as it will also make it easier to promote local investment,” he added.(APP)