Finance Minister Miftah Ismail asked foreign multinational corporations (MNCs) operating in Pakistan to present him with an export strategy on Friday, promising them “tax benefits.”
He congratulated multinational corporations for paying enormous sums of taxes, producing jobs, and bringing technology to the country in a tweet today.
“However, I request that each of them come me with a plan for exporting outside of Pakistan. For that, I’ll give them tax breaks “he stated.
His tweet comes after the government imposed import prohibitions on non-essential luxury items in order to cut the country’s massive import expenditure. Pakistan has been coping with a persistent current account deficit and, more recently, decreasing foreign exchange reserves due to fuel subsidies.
Ismail stated that the current account deficit for April was $623 million, which was “less than half the average” for the first nine months of the fiscal year. He called the change a “really encouraging sign for external stability.”
“With favorable IMF talks starting, we anticipate a rapid improvement in the economic situation,” he continued.
The minister’s tweet on granting tax incentives to foreign companies came after a meeting with the Indus Motor Company’s chief executive and vice-chairman, which state-run APP stated took place yesterday.
The minister stated that the government is dedicated to providing a “friendly and favorable environment” for investors and enterprises in order to boost economic activity and exports.
According to a statement released by the Ministry of Finance, Miftah told them that the 2019 budget would be business-friendly and contribute to the promotion of exports and enterprises in the economy.
“The administration is aware of business community concerns and roadblocks to expanding economic activity in the country,” he added.
Following the implementation of a “emergency economic plan,” the government decided to place a restriction on the import of non-essential luxury commodities. Automobiles, cellphones, household appliances, meat, fruits, crockery, sauces, dog and cat food, furniture, and confectionaries are among the prohibited commodities.
The decision was made to “save the country’s precious foreign cash,” according to Information Minister Marriyum Aurangzeb.
“These are products that are not in common use,” she explained, emphasising that it was a “emergency circumstance” and that Pakistanis would have to make sacrifices as part of the economic strategy.
According to Aurangzeb, the cost of these prohibitions would be over $6 billion.
She stated that import orders for which a letter of credit had already been opened or for which payment had already been paid would be processed, but that no new orders would be considered.
“We must lessen our reliance on imports,” she said, adding that the administration was now concentrating on exports. Local industry will grow under the government’s economic plan, according to the minister, as would job prospects.