Lahore: The Lahore Chamber of Commerce and Industry (LCCI) has expressed gratitude to the Government of Pakistan for abolishing a Rs 102 billion cross-subsidy on the industrial sector, while also calling for the immediate withdrawal of a similar Rs 90 billion levy on traders and commercial consumers. The announcement was made by LCCI President Faheem ur Rehman Saigol during an emergency press conference in Lahore.
According to Lahore Chamber of Commerce and Industry, the recent government decision to reduce electricity tariffs by Rs4.04 per unit and eliminate the cross-subsidy is a significant relief for the industrial sector. This move, Saigol noted, will help local industry navigate competitive pressures expected from the Free Trade Agreement between India and the European Union.
Saigol highlighted the benefits of a 3 percent reduction in export refinancing rates and the Rs4.04 cut in electricity wheeling charges, emphasizing the relief this will provide to exporters and industrial units. He called on the federal government to issue prompt notifications to enable industries and businesses to enhance production without delay.
The LCCI President contended that the Rs 90 billion cross-subsidy on traders and the commercial sector has become unsustainable. Its removal, he argued, would lower business costs, enhance consumer purchasing power, curb inflation, stabilize retail prices, and stimulate economic activity.
Saigol also addressed the issue of the super tax, suggesting that its collection in installments could prevent liquidity challenges for major taxpayers. He advocated for competitive electricity tariffs and interest rates to empower Pakistan to compete effectively with regional economies like India, China, Vietnam, and Bangladesh.
On energy reforms, the LCCI President proposed a shift from costly oil-based power generation to hydropower, suggesting that small dams and water reservoirs could generate over 20,000 megawatts of affordable electricity. He also raised concerns about capital outflow due to heavy real estate taxation, pointing to substantial investments in Dubai from Pakistani investors and emphasizing the need for tax reforms to attract investment back to Pakistan.
Senior LCCI officials expressed optimism that post-IMF program completion, the government would have more leeway to implement reforms, potentially steering the economy toward stability.
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