The APBF has asked the government to introduce reforms to make doing business easier in the context of annual ranking of countries by ease of doing business in the World Bank’s Doing Business Report.
APBF president Ibrahim Qureshi said that Pakistan has slipped three places on the Word Bank’s Ease of Doing Business Index and is now ranked a lowly 147th among 190 economies, denouncing the government’s claim of pro-business image in the country. He said that the index is mostly used as a guide by foreign investors to learn more about a country, aiding decisions on pouring in money in the economy.
It is unfortunate that the country slipped from its last year’s rating despite the introduction of some reforms in areas of starting a business and making international trade relatively easier. He said that the finance ministry mainly be blamed for the overall poor performance, as the country’s ranking declined on the indicators of paying taxes and getting credit.
Pakistan lost 16 positions on the indicator of paying taxes, standing at 172, according to the 2018 report. Last year, Pakistan’s ranking was 156. One of the reasons behind the dismal performance was the increase in overall tax rates that surged to 33.8% of total profits.
APBF president said that instead of broadening tax base, the government relied heavily on the existing extremely narrow tax base to meet its additional revenue requirements. This made business uncompetitive. Although the government reduced the overall corporate tax rate to 30%, it imposed Super Tax on big companies that jacked up tax contribution.
The report noted that Pakistan implemented some business reforms in 2017, making it easier to register a new business, transfer commercial property and facilitate cross-border trade.
Pakistan is among the South Asian economies that carried out around 20 business reforms in the past year, bringing to a total of 127 the number of reforms enacted in the region over the past 15 years, says the report which monitors the ease of doing business for small and medium-enterprises around the world.
“We have to take up a huge challenge to implement the reforms on creating an enabling business environment at federal level. It is appreciated that the Board of Investment and SECP are committed to implement reforms for a well-documented economy and a formal growing business sector,” the business leader said.
He said that due to the government’s growing budget financing needs, very little capital has been left for the business to expand. Moreover, the country did not make any progress on the issue of reliability of supply and transparency in electricity tariffs. Survey results show that despite the government’s focus on the energy sector the people perceptions did not change.
Ibrahim Qureshi said that the findings of the report serve as a reminder to the government that has claimed making Pakistan an easier place to do the business, besides helping it become one of the fastest 25 growing economies of the world.