Interview with Mr Irfan Iqbal Sheikh — President, Federation of Pakistan Chambers of Commerce & Industry (FPCCI)
- Make resources for growth, social sector and balance of payments remain difficult
- Fiscal targets unlikely to be accomplished
“I have always been of the opinion that economic prosperity would remain a dream unless and until all the Pakistanis, irrespective of their status, play their constructive role. Pakistan at the moment is facing the challenges on almost all the fronts of doing business, while in the present scenario the role of the business community has become even more important. You all are encouraged to get united under one umbrella of BMP and face the challenges of doing business in the turbulent times. ”
Profile:
Zubaida Group of Companies
- Alfatah Group
- API Ventures Pvt. Ltd. (Pharmaceuticals)
- Zubaida Agriculture and Dairy Farms
- ZM Associates
- Alfatah Travel & Tours Pvt. Ltd.
- Alfatah Electronics
- Asad Afzaal & Company
Irfan Iqbal Sheikh is an icon of business community. He has grown like a star on the Sky of Business horizon absolutely based on his untiring efforts and sincere vision for the business community.
Over the last decades of services for the business community, Irfan Iqbal Sheikh has been recommended by the businessman panel to represent this years’ president candidature to which Irfan Iqbal Shekh has accepted as yet another challenge for his business community. To his name are the adventures and achievements which have no parallel so far. He has high hopes and believes this is the time to do the best for our community which needs a vibrant but very perpetual leadership skill.
Irfan Iqbal Sheikh has made the empire from a mole and has the strongest determination to do the same for the business community, this year as well.
Business community needs to do their role by supporting Irfan Iqbal Sheikh for the position of President Federation of Pakistan Chamber of Commerce & Industry 2021.
Chairman
Chairman of Zubaida Group of Companies- Alfatah, Zubaida Agriculture and Dairy Farms and API Ventures (Pharmaceuticals). As a distinguished and most respected businessman of Pakistan, Mr. Irfan Iqbal managed to expand his family retail business from one flagship store to 31 multipurpose retail stores across Pakistan.
President LCCI
Mr Irfan Iqbal Sheikh has revamped the business proceedings of Lahore Chamber of commerce and Industries. The day He assumes office as President LCCI, since then there are numerous projects and achievements he has in his name and left the office with flying colors, Just to name following are the few of his milestones which he established during his tenure as President LCCI;
- Helped eased the business operations during lock down.
- Got relief in Utility bills for the business community.
- Got the long term and short term loan scheduled and sanctioned for business community.
One window facilitation centers were established at The LCCI premises; just to name a few of them:
- NADRA office
- FBR
- LESCO
- PASSPORT Office
- Driving License
- Excise n Taxation,
- PRA
- PESSI
- WeBOC
- POLICE Help desk
- National Tariff Commission
- PIA
- MOBILINK Micro Finance Bank
- BANK of PUNJAB.
High Profile Projects
API Ventures Pvt. Ltd
Developing a high profile project related to pharmaceuticals under the name of API Ventures Private Limited. This project would help curtail the import of the basic salts used in medicines by manufacturing it locally, helping the economy and health sector of Pakistan.
Alfatah E-Mall
This project is under construction, in the heart of the city adjacent to Hafeez centre, Gulberg Lahore. It is a 23-storey high rise building dedicated to commercial activities related to electronics e.g. computers and mobile phones, highly equipped and modernized corporate offices.
Zubaida Agriculture and Dairy Farms
These farms spread over almost 200 acres in Bhera, Sargodha District. Currently working with a Chinese company on a joint venture bringing latest agriculture practices such as drip irrigation, vertical farming and tunnel farming to Pakistan.
Cementing ties and boosting Mutual trade
Helped Pakistan to strive and establish stronger, better understanding an unflinching relationship with China, Russia and Central Asian States, in various spheres of business activities. We always worked for the export promotion and initiated several governmental level meetings to help the exporters to maintain the balance of trade in such harsh times like Corona days.
Mr Irfan Iqbal Sheikh is incumbent President of the apex trade & industry body of Pakistan, The Federation of Pakistan Chambers of Commerce & Industry (FPCCI). He shared the following perspective with PAKISTAN & GULF ECONOMIST about Federal Budget FY24.
Pakistan is at a cliffhanger moment of its economic history and federal budget for the fiscal year 2023-24 presents mixed picture of the economy; and, therefore, the fiscal targets set in the budget documents may not be fully achieved under the current circumstances. However, at the same time, we can understand that the government is under tremendous pressures to generate resources for development, social sector and balance of payments.
Additionally, the business community will be looking for any hidden taxes in budget – for the reason that for the past many years the governments keep chanting the clichéd mantra of no new tax; however, there had been many hidden taxes in the past budgets, when they were fully deciphered and dissected.
Contrariwise, the hidden taxes are always levied on the already taxed, active filers and law-abiding taxpayers – and, in this manner, we punish the tax filers and let the non-filers go unregistered, untaxed, un-scrutinized and have impunity against the law. This should have been exactly the opposite, i.e. tax filers should be rewarded, facilitated and incentivized – and, non-filers should be made to face the music and tax net must be broadened.
Coming back to the budget, there are some shortcomings and some relief measures in the budget. It has been observed with profound concerns that the current budget is also devoid of structural reforms; ignorance towards simplification of taxation system; broadening of the tax-base is amiss; no rationalization of income taxes; promotion of industrialization measures are absent and import substitution is nowhere on the agenda. Then again, everything boils down to the available pool of resources at government’s disposal.
As far as the budgetary specifics are concerned, target of PKR9,200 billion revenue not only looks difficult; but, it can have far-reaching negative consequences. Because, last year’s target was PKR7,500 billion; which is still under failing efforts to achieve. Last year, the economic growth rate was close to 6 percent; while this year the economic growth rate has dropped a lot to only 0.29 percent. So, how can more taxes be imposed on very little economic growth performance?
What is important to think, at this time, is that the government is imposing new taxes; and, at the same time, increasing the taxation rates on the existing taxpayers – while not adding new taxpayers and not increasing the tax-net. It does appear that the burden will be placed on those already included in the current tax-net.
Let it be crystal clear, these measures will not work; until & unless interest rate; exchange rate; petroleum prices; political uncertainty and economic policies are stabilized, the economy will not perform, he added.
Let’s come to the relief measures, on account of poverty alleviation, the amount of loans enhanced from PKR1,800 billion to 2,055 billion in the budget 2023-24; solar energy for tube wells and duty on seeds abolished – these two measures can go a long way in our endeavors to achieve food security, provided the new government keeps these incentives intact.
Additionally, the scheme for youth is a welcome initiative. Youth have to create their own employment through entrepreneuship; as new institutions, businesses or marketplaces are not being developed in the country. In this regard, 50 percent reduction in the tax rate for the youth is also welcome.
Information Technology industry is growing rapidly in Pakistan; and, its share in exports is also increasing likewise. For the benefits and incentives that were announced in the budget, in which this sector will be given the status of SMEs, it will certainly lead to the development of IT. Primarily, Pakistan’s IT & ITeS industry is export-oriented and incentivizing it will result in export growth. Removal of regulatory duty on equipment of IT sector is a good step to stabilize the hardware prices.
Women account for 52 percent of Pakistan’s population and barely PKR5 billion have been kept for women empowerment; which is grossly insufficient; considering the current situation and considering the proportion of women in the population. No country has developed in the world without educating, empowering, emancipating and including women into the workforce.
PKR1,150 billion have been allocated in the development budget; but, merit and priorities must be well considered in its use and allocation. It has been seen that when the government deficit is increasing, first of all, there is a reduction in the development budget and obstacles in its allocation. Therefore, the devil lies in the implementation as no prior PSDP program could be completed to its full 100 percent allocation – mere announcements notwithstanding practically.
There are some initiatives to enhance services exports; but, the volume of exports of our service sector is not significant. The allocation of PKR. 491.3 billion for infrastructure is a good initiative for which the FPCCI; in its budget proposals; emphasized that there is a dire need for attention to infrastructure development.
Increase in the support of Real Estate Investment Trust (REIT) will make it easier to complete the pending projects in the construction sector as 80 percent of the ongoing construction projects could not be completed in FY23. Abolishment of regulatory duty on special steel round bar will help the construction sector’s growth and bring down prices – which will provide relief to the middle-class.
Allocating PKR1,804 billion for defense is also welcome; considering the current law & order and external security situation; but, it needs more resources for country’s security. At this time, the country is facing different types of security challenges and terrorism on a multitude of fronts. Business community stands with state in this fight.
Extending the warehousing period of perishable items from one month to three months will facilitate trade. In order to reduce the clearance time, importers have also been given the facility, in the current budget, that they can go to adjudication through Custom Computrized System. New measures, including rephrase of the definition of smuggling, will also help prevent smuggling that goes untaxed.
FPCCI is concerned over the extension of exemption of sales tax on erstwhile FATA/PATA for one more year; while the demand was that this exemption should be abolished, because it leads to misuse & uncompetitive business environment in the country.
In the end, the budget FY24 can be summarized as a mixed bag at best and unrealistic at worst; in terms of the probability of it achieving fiscal targets – which, in turn, keeps the door open for a mini-budget like many other prior fiscal years. Nonetheless, business community will not accept any mini-budget on behest of the IMF – as it will tantamount to inconsistency and unreliability in economic policies.