LAHORE: Pakistan’s Prime Minister Imran Khan on Tuesday unveiled an incentives package for the promotion of the industrial sector with the focus on attracting investment from the local and expatriate business community and strengthening the country’s export-oriented industrial and manufacturing base.
“Along with local businessmen, we are also inviting the Overseas Pakistani entrepreneurs to invest in the country’s industrial sector. Besides the expatriates, the local businessmen in the joint venture will also enjoy a five-year tax holiday with no questions,” he said while addressing a ceremony, which was attended by a large number of businessmen and representatives of the chambers of commerce and industry.
The Prime Minister said that the government was doing all for the promotion of export-oriented industries – vital for the country’s socio-economic development and progress – including the measures to strengthen Small and Medium Enterprises (SMEs) and revive the sick industrial units.
He said that there was a need to attract the 9 million Overseas Pakistanis – a precious asset for the country – to invest in their homeland by incentivizing and giving them confidence in the protection of their hard-earned capital.
Prime Minister Imran Khan while stressing the importance of the industrial and manufacturing sector for wealth creation and development of the country, said that countries cannot achieve progress only by producing wheat and vegetables.
He said that the policy of nationalization in the 1970s, a socialist philosophy, changed the trajectory of growth and industrial development in Pakistan, which was moving in the right direction some 55 years back.
The Prime Minister also mentioned the anti-wealth creation and anti-profit-making policies of subsequent governments as major hurdles in the way of required growth in industries in Pakistan, which led to major economic problems including the shortage of dollars and Current Account Deficit.
He said it was the present government that decided to promote industries, particularly the export-oriented industries.
The Prime Minister referred to a graph-chart which he showed in his February 28 address to the nation and said Pakistan during the 2000-2020 period remained at the lowest in terms of growth in exports as compared to the countries including e Rwanda, Vietnam, India, China, and Bangladesh.
“Lacks of long-term planning, shortage of dollars, less or no growth in exports force the country to approach the International Monetary Fund (IMF),” he remarked.
The Prime Minister said that the present government’s two-pronged industrial policy focused on the promotion of SMEs through improved regulations and ease of doing business; and the revival of sick industrial units.
Prime Minister Imran Khan pointed to his experience of dealing with the Overseas Pakistanis due to a fundraising campaign for Shaukat Khanum hospital 30 years back and said among the 9 million expatriates, there were many successful professionals, businessmen, and entrepreneurs.
He said the present government also took various measures including the setting of special courts and crackdown on plot mafias, to restore the confidence of expatriates, which was shattered due to the illegal occupation of their plots.
The Prime Minister pointing towards the much less growth in the Information Technology (IT) sector over the last many years due to lack of policies said that the present government was incentivizing the IT sector, which had a lot of potentials to take the country forward in terms of exports.
He said that as against India’s US $ 140 billion annual IT exports, Pakistan was just hovering around $ 4 billion per annum– 70% growth achieved during the present government.
The Prime Minister said that since Pakistan stood second in the world in terms of the young population, it was important to promote the IT sector. For the first time, the present government came up with an IT policy, he added.
“We are trying to get the country standing on its own feet,” he said and remarked that one of those countries, which achieve self-reliance and development, were able to make and pursue an independent foreign policy.
The Prime Minister in that respect mentioned the country’s conflicting foreign policies during the Soviet attack on Afghanistan and then the US attack on Afghanistan after 9/11. “We should not blame the United States for the disrespect but ourselves,” he remarked.
Pointing to the lack of Pakistan’s policy on exports, Imran Khan recalled his 20 years conversation with Malaysian leader Mahatir Muhammad, who told how his country, which used to produce only tin and rubber materials, achieved the US $ 80 billion annual exports after he promoted the cottage industry and SMEs to produce electronic goods.
The Prime Minister said he considered SMEs as the backbone of industry and his government was taking all possible measures for the promotion of SMEs and attracting overseas Pakistanis to invest in their country.
Salient Features of Promotion Package for Industry 2022:
1) Incentives for Industrial promotion:
**Investment in new industrial units and expansion and modernization of existing units;
**5% across the board payment of tax for all amounts invested
**Minimum investment threshold Rs. 50 million
**Industrial unit to be set up as a company;
**Commercial production to begin by 30th June 2024;
**Previous beneficiaries of Amnesty Schemes of 2018 and 2019 not eligible;
**Bank loan defaulters in the last three years not eligible.
2. Incentive for Revival of Sick Units:
**Applicable only to companies;
**Industrial units having accumulated losses in continuous 3 years to be treated as sick units;
**Acquiring company allowed to adjust losses of the sick units against its income for three years;
**Revival of the sick unit to be completed within three years of acquisition.
3. Incentive for Foreign Investment in Industrial Sector:
**Pakistan citizens, who are non-resident for five years and resident Pakistani having declared foreign assets, are eligible to invest;
**One-time tax credit equal to 100% of PKR equivalent of remittance to be availed in 5 years;
**Investment to be made in a new industrial unit;
**Commercial production to start by 30th June 2024;
**New industrial unit to be a company.