Industries disappointed with 'sudden Uturns' in government economic policy
ISLAMABAD: After a nearly 35% increase in electricity prices in the last 18 months, a serious controversy has begun between the government and the country's largest enterprises.
The Pakistan Business Council, comprising 82 major business houses in Pakistan with an 18% stake in the country's revenue, accused the government of suddenly taking out utterances in policy matters that were negatively affecting investor confidence and the country's ability.
According to the report, the All Pakistan Textile Association (APTMA), consisting of 400 textile units, had earlier criticized the government for keeping the export industry at a fixed price of 7.5 paise per unit.
The power division, on the other hand, said that they did not withdraw any facility but subsidy was given to the export sector at the basic rate and other things like surcharges etc. would have to be paid to industries.
According to the division, several ministries had jointly decided not to allow additional costs beyond the basic cost due to a limited budget.
It is to be noted that the controversy came to light on January 13 when the Power Division had directed the power distribution companies to pay additional charges, such as financial cost surcharges, Neelam Jhelum surcharges, tax fixed surcharges, in addition to 7.5 paise. Include tariff adjustments and fuel price adjustments that occur months later.
On this, Aptma wrote a letter to the Minister of Energy, Omar Ayub, citing a notification issued by his ministry on February 8, 2019, stating that the ECC has made it clear that Zero-rated industries are paying 7.5 paise per unit. And the other charges mentioned above will not apply to this industry but they will be part of the subsidy claimed by the government.
Meanwhile, the Pakistan Business Council also said in a strongly worded statement that they were disappointed with 'another sudden turnaround in government policy' which, if not withdrawn, threatened Pakistan's exports and reduced investment capacity and capacity.
The PBC regretted that this was not the first step to change the policy, which would have a negative impact on the business, previously investing in plants and machinery already built in the Finance Act 2019 or being built by June 30. Reduced the tax credit for the same, completely eliminating the 10% tax credit on the investment made between July 1 and June 30, 2021.
The PBC further stated that 'a policy with dismal effects is not favourable for export competitiveness, import-substitution, investment or jobs'.
According to the Business Council, the third recent policy is to reduce import duty on mobile phones, the council said that import duty was increased to increase local production after which several investments were also withdrawn.
He called upon the government to revise all these utterances to restore competitiveness and boost investment in the Pakistani industry.