By AMANULLAH BASHAR
Apr 01 - 07, 2002
Iftikhar Ghani Vohra, is the Senior Vice President
of Karachi Chamber of Commerce and Industry (KCCI). He is a prominent
businessman and serving for the cause of trade and industry for the
last 25 years in Karachi. He has been associated with KCCI in one
capacity or the other. He served KCCI as the chairman of various
sub-committees in the past.
Iftikhar Vohra is the Chief Executive of I.G.
Traders, which deals in Petro-Chemicals, Rubber and in a variety of
relevant items.
PAGE:
Being the senior leader of Pakistan's largest chamber what do you feel
about economic revival in Pakistan.
VOHRA:
Apart from official version about strong economic signals especially
at macro level, the ground reality gives a different picture. Markets
and Bazaars are presenting a deserted look due to absence of interest
of the buyers or whatever the reasons may be.
PAGE:
Would you suggest ways to improve economic activity at the market
level.
VOHRA:
In fact the government has announced the best economic policies, yet
there is the question of implementation. However many policies
announced by the government are implemented in letter and spirit. This
is the culture of bureaucratic arrogance, greed and corruption, which
never allows even the best decisions to bear fruit.
Take the current campaign of the government for
revenue generation and documentation. The government has imposed the
sales tax on one hand while over six per cent withholding or
presumptive tax is being charged at the port level. Such instances of
double taxation will have to be checked before levying any tax on any
commodity.
PAGE:
Are you not in favour of the documentation to bring stability to the
economy.
VOHRA:
The primary purpose of the government policies of documentation is to
enhance the tax base, contrary to this focus what the results are
coming out. In fact this will open new doors of corruption and
opportunities to the corrupt. Instead of going into complexities, the
system should be made as simple as possible to get maximum tax from
the willing tax payers instead of allowing it to going to the pockets
of the corrupt.
PAGE:
The power utility services that is WAPDA and KESC have been allowed to
further increase in the tariff. How the industry will adjust this
increase except passing it on to the consumers to overcome the
increase in cost of production.
VOHRA:
KCCI has already issued its version on the increase in power tariff.
KCCI believes that industrial consumers must not be targeted and
blamed for the losses incur into the KESC system over a number of
years. It has been accused that the industrial consumers are using
more power load than what had been sanctioned to them.
The KCCI brushes aside this blame on the grounds
that generally industrial units have maximum demand indicator meters
indicating the highest consumption of electricity, regardless
sanctioned load. Since every units consumed by the industrial
consumers is paid accordingly hence the question of loss of revenue to
the KESC does not arise. The mechanism of regularizing the load and
the operation conducted for the purpose, left much to be desired.
Pressure rather than persuasion or consensus of the two sides
characterizes this campaign.
PAGE:
The imposition of 15 per cent GST on medicines is generally being
opposed by different segments of the society. What is the stand of the
KCCI on this issue?
VOHRA:
The KCCI has already expressed its resentment on the imposition of 15
per cent GST on all kinds of medicines, whether imported or locally
produced. The cost price of medicines in Pakistan was already on the
higher side and this additional burden would have a crippling effect
on pharmaceutical industry, rendering the medicines beyond the reach
of the common man. We should look at this issue purely on humanitarian
grounds. Medicine was an item which is the most essential and
lifesaving and to target it for revenue mobilization, at the behest of
IMF was indeed most unfortunate. On the other hand government
expenditures on the health sector are already on quite insignificant
level.
PAGE:
What would you suggest to improve the health sector in Pakistan:
VOHRA:
Although the import duty has been reduced from 10 per cent to 5 per
cent on raw material for manufacturers of pharmaceutical products,
however it would not suffice to compensate the sales tax. The modus
operandi and mechanism of imposing sales tax was so complicated and
cumbersome that printing of sales tax amount and to maintain complete
record of almost 30,000 registered medicines would pose many-sided
problems both for the collectors and the receivers. The contention of
utilizing the additional amount to be mobilized through sales tax of
around Rs5 billion on health sector was not tenable because the amount
to be recovered from the same sector would be reinvested in the same
sector. On the other hand the complications being created in health
sector may scare away further investment in this sector.
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