LAHORE: Finance Minister Miftah Ismail disclosed on Saturday that “none of the friendly countries is ready to financially support Pakistan” because it “has an imbalanced economy”, caused mainly by a huge difference between imports and exports.

He said the government, in a bid to bridge the gap between exports and imports, had taxed those manufacturing industries that had zero contribution to exports, besides bringing various other such sectors, including traders and builders, into the tax net.

Mr Ismail was addressing an interactive session with the business community, CEOs of leading companies, financial and legal experts and during a visit to a private health facility.

“What a country can do when its imports continue to rise and now [despite measures taken to ban import of various items] these have reached $80 billion. On the other hand, our exports are fetching just $30bn or so,” the minister said before asking his audience, “now you tell us how, with such behaviour, this country can move ahead.”

Minister makes impassioned plea to business community to help flood victims by donating 1pc of their income

“Moreover,” he deplored, “none of our friendly countries are ready to give money to support us financially.”

While responding to questions, he said the textile sector alone had a contribution of $20bn in exports. Due to lack of diversification and value addition, many industries could not go for exports and kept importing raw material, etc, for manufacturing their goods, he pointed out.

“Therefore, we decided to impose 5 per cent additional tax on manufacturers having zero contribution to exports. We are just doing this to woo them to start exports and contribute to bridging gap between imports and exports,” he said. “When anything from Pakistan can be exported, then why our manufacturing sector is not going for it,” he wondered.

He said there was no issue related to opening of letters of credit (LCs) for those involved in exports. “However, due to shortage of dollars, we have imposed a ban on import of various items. That is why the opening of LCs for such importers is an issue, but not for those importing goods / material to use it for manufacturing export-related goods or those direly in need for some emergent requirement,” he explained.

While talking about fixed tax, the minister said there was a plan to collect Rs41bn tax from the shopkeepers. Later, it was changed due to some issues [type of shopkeepers, businesses volume, etc] and it was decided to have three types of fixed taxes — Rs3,000, Rs5,000 and Rs10,000. “Through this, we will, initially, collect Rs27bn from this sector.

He assured the business community that super tax would not be imposed for next calendar year. However, he appealed to the participants to help the flood victims by donating 1pc of their income.

While discussing the massive devastation caused by unprecedented rains and floods, Mr Ismail became overcome with emotion as he passionately urged businesspersons to help the government rehabilitate the flood victims as well as the damaged infrastructure.

Speaking at the offices of All Pakistan Textile Mills Association, FM Ismail said that disparity in gas price between various provinces would be “seriously reconsidered” and expressed the hope the issue would be resolved shortly with the approval of the cabinet.

On the issue of liquidity crunch and problems being faced in getting clearance of imported consignments in the wake of restrictions imposed by the State Bank, he directed the SBP governor to visit the APTMA office next week to address all the finance-related issues.

Published in Dawn, September 11th, 2022

Categorized in: