In order to revive Pakistan’s economy and boost industrial activities, the government has prepared a major relief package for the industrial sector ahead of the upcoming talks with the IMF, under which it has been proposed to reduce the burden of billions of rupees.
According to sources, a proposal to eliminate cross-subsidies of about Rs 102 billion imposed on industrial consumers is under consideration, which is expected to significantly reduce electricity and gas tariffs. Officials say that this move will reduce production costs and make the local industry more competitive in the international market.
According to the documents, a one percent reduction in super tax has been proposed annually, under which this rate will be reduced from 10 percent to 5 percent in the next five years. Moreover, a strategy to eliminate super tax in phases as the financial capacity improves is also being considered.
It also includes a proposal to simplify the tax filing and audit system for exporters, eliminate unnecessary levies and limit audits to once every three years.
According to economists, this package could prove to be “oxygen” for the industry. An industry analyst said, “Pakistani products were becoming expensive due to cross-subsidies and super taxes. If this burden is reduced, then a significant increase in exports is possible.”
The government is expecting that this package will receive a positive reception in the negotiations with the IMF.