Whoever comes into power July 25 needs to read this: It is a list of things to do created by the Pakistan Business Council whose members are worried about the economy.
The who’s who of corporate Pakistan got together on Monday to present their economic agenda. Here are five simple takeaways in a very simple form.
1. Make electricity cheap
Pakistan’s electricity and gas prices are double India and Bangladesh’s. Our exports compete with theirs.
But when we pay twice as much for power and gas it makes our products more expensive. It raises the cost of doing business.
Solution: The new government should think about giving businesses power on competitive tariffs.
2. Make more people pay taxes
Manufacturing gives us 13.5% of our GDP. But it cannot continue to be burdened with paying 58% of our national tax revenue. Also, Pakistan has one of the world’s most complex tax structures. There are 52 types of taxes.
Solution: Make other areas of the economy pay taxes like agriculture, wholesale, retail trade and the people who are professionals (lawyers and doctors). Unify all the different taxes to make it simpler.
3. Get everyone on the books
So much of our economy is undocumented or off the books. It could be taxed.
Solution: Get NADRA to track people’s income and property. Give the underground economy a level playing field and make all informal businesses doing taxable stuff, file their tax returns.
4. Dump the losers
Public sector companies, also known as state-owned enterprises, are a big drain on the economy. They cost us over Rs1 trillion. There are 183 of them out of which 90% are running in losses.
Solution: Form Government Holding Companies for state-owned companies and classify them in three ways.
– Those that should be privatized or liquidated immediately
– Those that need to be restructured for privatization
– Those that should be kept as government entities for strategic reasons.
5. Boost local guys
Pakistan Business Council’s CEO Ehsan Malik said that Pakistan has a robust fan industry based out of Gujranwala and Faisalabad yet it imports fans from other countries.
Solution: Use tariffs to promote local products over imported ones.