- BOI Secretary Asad Rehman Gilani has said that we talk about the investment but we have to take care of domestic investment along with FDI
Lahore: Board of Investment Secretary Asad Rehman Gilani on Monday said that 70 different types of regulators are working in our country.
It has become a regulatory regime in which the industry is bound. This should not happen.
He was speaking at the Lahore Chamber of Commerce and Industry. LCCI President Kashif Anwar also spoke on the occasion while Executive Committee members were present.
Secretary BOI said that we talk about the investment but we have to take care of domestic investment along with FDI. Our own people have established industry by working hard. Now we have to nurture the domestic industry.
He said that BOI has launched the Pakistan Regulatory Modernization Initiative (PRMI), which aims to modernize the regulatory regime and prevent regulators from becoming rigid. He said that one of the ways to do this is to talk to all the regulators to identify the regulations that have been in their rule books for 75 years that are completely obsolete. The applicable regulations should be entered in the BOI registry and the rest should be removed.
He said that the laws that issue notices to businesses for minor infractions should be relaxed. The overload of notices will be eliminated. Regulations will be minimized and any new regulations will be finalized after study and consultation with the business community.
He said that under PRMI, regulators will be trained and instructed on how to make regulations. He said that it has been noticed that there are 20 to 22 regulators in the IT sector alone. We have created a registry, the purpose of which will be to give one application instead of going to different departments. BOI will conduct clearance from all 22 departments. So far 10 regulators have expressed their willingness with us. After that we will move to other sectors like pharmaceuticals, steel, etc.
He said that Invest Pakistan has been launched with the support of the British Government. We want the business community to sit with us for the Invest Pakistan program and five year policies should be formulated. Business community should cooperate with us in national interest.
LCCI President Kashif Anwar said that Lahore Chamber has always emphasized on making the Rules & Regulations simple and business friendly so that the business climate in the country can be improved and all possible facilitation for the investors should be ensured. This will definitely help in promoting Ease of Doing Business.
He said that promotion of foreign investment as well as local investment is the most important need of the hour. According to the Economic Survey of Pakistan, the ratio of total investment in our country is only 15% of Gross Domestic Production, which is quite low. The share of private investment in this is only 10% of GDP, which has become inevitable to increase. We hope that BOI Initiatives like Invest Pakistan will be helpful in this regard.
The LCCI President said that if we talk about the data of Net Foreign Direct Investment, it was 2.6 billion dollars in 2019-20, which decreased to 1.82 billion dollars in 2020-21, while in 2021-22, its volume was limited to only 1.87 billion dollars, which is extremely low in terms of requirements of the economy.
He said that local investment cannot increase until the problems of local industries are 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 and have to pay regulatory duties, customs duties and additional customs duties on them, which need to be eliminated. . Besides reducing the rate of withholding tax for businesses, the issues of pending refunds and multiple audits should also be resolved.
He said that in order to promote local investment, our government has to solve some problems related to taxation on a priority basis, which will also improve the ease of doing business. Currently taxpayers have to undergo multiple audits of income tax and sales tax. He appealed that the number of these audits should be reduced. Taxpayers face penalties, surcharges and inquiries on these audits, withholding of registrants, penalties for late filing of statements/income tax returns and many other issues. The rate of penalties and surcharges should be reduced immediately for taxpayers.
He said that it is almost impossible to increase investment without reducing the cost of doing business. Our industries are facing problems like policy rate which has reached 20% and high energy cost due to which the production cost has increased a lot. In this situation, it has become more difficult for exporters to compete in foreign markets. In this regard, there is also a need to work on an emergency basis.
The LCCI President said that the economic conditions require that the government should give first priority to import substitution and give second priority to increasing exports to the desired extent, which we think can be possible only with industrialization and localization.
He said that the Board of Investment also needs to attract private investment to build new dams and reservoirs. We should also expand the solar energy network as we still get less than 5% of our energy requirement from it. It will also help in bringing the imports to minimum level.
He said that the process of industrialization will be strengthened with the help of Special Economic Zones, but if they are considered as Special Export Zones, it will make it easier to invest in them as well as increase exports.
He said that Lahore Chamber has informed the leaders of almost all the major political parties of Pakistan through letters in view of the economic situation of the country that we have to overcome the current economic situation of the country. We have put together some key proposals to do so. We have asked political leaders to share their Economic Manifesto with us to help create a Charter of Economy that articulates the position of all political parties. Besides, we have also written letters to public and private universities asking them to give us their opinion in finalizing the Charter of Economy.
“We think the government should immediately announce the Declaration Scheme so that the Undeclared Foreign Reserves can become part of our economy”, he added.
He said that the steel sector has demonstrated a protest against the Environment Department. In this scenario, promotion of investment is not possible.