15% Tax GDP ratio must to maintain 7% economic growth : Tareen

KARACHI, (APP): Advisor to Prime Minister on Finance, Revenue and Economic Affairs, Shuakat Tareen has underlined the need for bringing all kind of income under tax net to ensure high rate of economic growth. “ We need 15% tax‑GDP ratio only to maintain economic growth at around 7 percent. If we want more economic growth we will have to tax every income, “ the Advisor said while addressing the members of Korangi Association of Trade and Industry (KATI) at a local hotel on Saturday night.

He assured that no official of tax collecting department would harass any industrialist or other tax‑payers.

On pointation from Chairman KATI , Mian Zahid Hussain, Mr Tareen said he had already directed the Federal Board of Revenue (FBR) authorities to rush to Karachi and address the complaints of businessmen about the Customs especially the demurrage issue at the sea‑ports here.

He agreed to the proposal from KATI member that for better management KESC can be bifurcated into two or three distribution companies, and that like in Lahore the generation and distribution can be separated.

He noted that KESC has shown no improvement even after its privatisation and that it continued to incur billions of rupees losses every year. KESC has been nothing to power supplying agencies like PEPCO and it owes billions of rupees.

“ KESC is getting just free power supply from Government. Even than it has failed to deliver to people,” he remarked.

He said a high level Government meeting is scheduled to be held in Islamabad on January 05, 2009 where various important issues would be discussed including KESC and practical solutions would be found and the decisions would be taken to provide some relief to industry and the general public on various accounts.

The PM’s Advisor informed the business community that the Government is working out to solve gas and electricity supply, and the tariffs issues.

He said new policy on gas and electricity will be announced soon. This is based on equalization of tariff for all kind of consumers—industry, small business units and domestic‑to slash the burden on the industry of subsidies being given to other categories of the consumers. This will help in reducing the cost of doing business for industrialists in the country.

“ I strong believe that all the consumers should pay same price of electricity and gas ,” he asserted adding that if the Government wants to provide some relief to any category of the consumers it should give subsidy directly to them.

He said the Government was going to take various important decisions soon on gas and power to the satisfaction of the business community.

He said the Government has also initiated the formulation of national industrial policy and the process would be carried on through maximum participation of business community of the country.

He assured that due representation of the business community would be ensured on the boards of all policy‑making Government institutions including Federal Board of Revenue ( FBR) , National Power Regulatory Authority (NEPRA) and Oil and Gas Regulatory Authority (OGRA) to make the polices and systems more practical and targeted‑oriented.

The present Government’s main focus is to strengthen manufacturing and agriculture sectors which have great potential to grow and diversify , he said.

The PM’s Advisor on Finance and Economic Affairs said the Government was using all options and resources to bring the inflation and interest rate down to single digit.

On pointation from the business leadership that during the last few years the banks have been earning undue profits, with spread up to 7 percent, the Advisor suggested that through interactive meetings of the bankers and the business community the issue would be weighed and settled to the satisfaction of all the stakeholders.

“ I would like to request the bankers to provide maximum relief to the businessmen and the public,” he said.

He said the core inflation was coming down and when the data of December 2008 would come out, there would be significant decline in the inflation rate.

About the interest , he said he would arrange meetings of the business representatives with the new Governor State Bank of Pakistan to provide both sides a platform to convince each other so that the banking policies should win the confidence and support of the businessmen.

Mr. Tareen said that he would not support tight monetary policy in the country when oil and food prices were coming down.

He assured the KATI leadership of his full support in establishment of the proposed S.M.Muneer Economic University in Karachi.

Others who spoke included Patron‑in‑Chief of KATI, S.M. Muneer, Chief Executive Officer of KITE Limited and senior businessman Abdul Haseeb Khan.

Federal Advisor on Textile Industry and Chairman of Baig Group of Industries, Dr. Mirza Ikhtiar Baig was also present.