State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra has assured that SBP will look into the possibility of reviving SBP-KCCI Import Export Committee as the Karachi Chamber, being the most important chamber of Pakistan, represents the largest city and plays a vital role in the economic activities of Pakistan.
Speaking at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI), Ashraf Wathra paid tribute to KCCI for its proactive role in resolving issues being faced by the business and industrial community. “We will continue with hold frequent interactions with Karachi Chamber from time to time and I will personally follow up the decisions taken in dealing with issues faced by business and industrial community”, he added.
Ashraf Wathra said that SBP expects GDP growth of 5 percent next year but SBP was focused on achieving strong GDP growth of 7 percent, which will surely create jobs. He informed that the Ministry of Finance and the Federal Board of Revenue have agreed to increase the banking transaction threshold from the existing Rs 50,000 per day to Rs 100,000 for charging withholding tax in the upcoming budget of 2017-18.
Highlighting the growth in credit to private sector, governor SBP said that credit to private sector has expanded to Rs 348 billion this year as compared to Rs267 billion last year. He informed that the State Bank was focused on two key aspects in the development of SME sector which include provision of an enabling regulatory environment and market development. “7 percent of total credit to private sector represents SME finance which needs to be enhanced to 15 percent by 2020. This is not going to be an easy target so all stakeholders will have to make collective efforts and in this regard, we have already taken some practical steps”, he added.
He said that EXIM bank has been established in order to provide export credit, minimize the cost of doing business, and help exporters by reducing risks through export credit guarantees and insurance facilities. In this regard, technical assistance has been sought from the Asian Development Bank and negotiations were at an advance stage whereas the government has also published an advertisement to appoint chief executive officer of the bank.
In this remarks, KCCI Businessmen Group & Former President Chairman Siraj Kassam Teli, while referring to one of the hot topic nowadays, said that some big names were uncovered in Panama Leaks who were accused of illegally sending funds abroad but interestingly, all of them claimed of sending these funds legally which means some relevant regulations exist for legally transferring funds abroad but the common man as well as many businessmen remain totally unaware of such regulations.
Underscoring the need to devise a proper system to raise awareness about regulations pertaining to remitting funds abroad, Siraj Teli said that if anyone wants to transfer funds abroad for investment or any other purpose and regulations for such transfers were also available then the same should be publicized amongst the masses to clarify all types of confusions.
Chairman BMG also advised the State Bank to come up with a clear definition of remittances being sent abroad by categorizing remittances sent abroad by business community and others as there is a difference in funds being transferred by the business community and others.
“Although it is illegal even on part of business community to transfer funds without paying the income tax, but these businessmen transfer funds which are extracted from their own businesses whereas others remit stolen funds and those funds which have been acquired through corruption”, he explained, adding that some businessmen transfer funds for investment purposes whereas some transfer for safety and as backup due to uncertain conditions in Pakistan.
Referring to amnesty schemes, he categorically stated that no amnesty scheme would help in bringing back funds to Pakistan due to trust deficit. He said that an Amnesty Scheme, which is strictly devised without considering the personal interests and legislated under the first schedule of the Constitution that will make it irreversible, may result in bringing back some funds otherwise amnesty schemes have always failed to achieve the desired results. Amnesty schemes are sheer injustice to loyal taxpayers who have been honesty and legally making their earnings and paying all the taxes, he opined.
Siraj Teli further pointed out that although the total number of bank accounts maintained by businessmen outside Pakistan might be greater as compared to others but the funds in business community’s accounts will certainly be less as compared to the massive amount of looted funds by others. “If the funds in bank accounts of 85 businessmen are evaluated and compared with the massive money lying in accounts of just 15 others, the consolidated amount of these 15 accounts will be much greater as compared to the funds possessed by 85 businessmen”, he added.
Earlier, KCCI President Shamim Ahmed Firpo, while referring to the hardships being faced by the business and industrial community due to imposition of 100 percent margin deposit requirement on opening of Letter of Credit (LC) and Contracts for importing certain items, said that this decision needs to be reviewed as it would promote smuggling, inflate prices of many items and intensify hardships not only for the concerned traders but also for the general public. “Except a few items, most of the items are used in almost every single household across Pakistan”, he added.
In order to deal with descending foreign reserves, Shamim Firpo urged to create an enabling business environment by bringing down the cost of doing business whereas the State Bank should incentivize the manufacturing sector by ensuring easier access to finance.
Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, Vice Chairmen BMG Tahir Khaliq and Anjum Nisar, President KCCI Shamim Ahmed Firpo, Senior Vice President KCCI Asif Nisar, Vice President KCCI Muhammad Younus Soomro, Chairman Banking & Insurance Sub-Committee Atif Jamil-ur-Rehman, Former President KCCI AQ Khalil and others were present on the occasion.
