ISLAMABAD: PALSP HAS CALLED UPON THE GOVERNMENT REGARDING THE SITUATION OF GLOBAL ECONOMY WHICH IS LIKELY HEADED TOWARDS DEEP RECESSION DUE TO COVID-19 OUTBREAK! CALLING IT AN EXTRA ORDINARY SITUATION WHICH CALLS FOR EXTRA ORDINARY MEASURES.
In response to this crisis, governments and central banks all over the world have enacted fiscal and monetary stimulus measures to counteract the disruption caused by the coronavirus.
With the Pakistani economy already struggling to stay afloat, the Corona Virus crisis is going to create a severe cash crunch and drastic reduction in demand. These factors are sure to leave many businesses bankrupt and hundreds of thousands unemployed unless the government acts immediately.
PALSP has suggested following measures to avoid a complete meltdown of the economy:
Interest rates must be cut to 5% immediately for the next 12 months as an extra ordinary measure. (US has recently cut its rates to 0%).
All principal payments for long term and short term loans should be deferred for the next 12 months while industry can try to service interest at a reduced rate of 5%.
Minimum rate of turnover tax for industry and retailers should be reduced to 0.25% with immediate effect.
RD and other import duties on steel meltable scrap should be reduced to 0% as it is a primary raw material for the steel industry. And all duties & taxes on also PCT 7204.4920 for un-serviceable auto parts be reduced to zero percent.
100% adjustment of Sales Tax input may be allowed against the available output. Currently steels companies are required to withhold 10% sales tax even though full adjustment is available.
Immediately issue orders to adjust full sales tax (input) to all documented Steel Industry on their opening inventory of July 01, 2019. Billions of rupees are stuck with FBR, despite a clear understanding on change of sales tax regime.
Fixed ITP on Scrap of US 360 per ton may be removed and taxes should be collected on the actual transactional values.
Timely and targeted measures are need of the hour to support businesses through this period of disruption caused by COVID-19. Govt of Pakistan must act now to save the economy from de-industrialization & jobs.