APBF for raising country’s tax base to strengthen tax-to-GDP ratio

ISLAMABAD, SEPT 1 (DNA) – Raising grave concern over the poor performance of the exports the All Pakistan Business Forum (APBF) advocated the need for raising the country’s tax base so that tax-to-GDP ratio improves from current poor level. He urged the trade officers to explore opportunities to diversify exports of goods and services in their respective areas, asking them to meet the challenges faced by Pakistan in European markets.

The APBF President Syed Maaz Mahmood said that country’s major export markets did not see any significant growth in importing goods from Pakistan in the financial year ended on June 30 this year. He also suggested the ministry to devise strategies for promotion of Pakistani products, calling upon trade officers to take advantage of opportunities offered by China-Pakistan Economic Corridor (CPEC).

The APBF President, quoting the latest figures, stated that the exports to the US largely remain dissatisfied while those to China registered a slight decline. Exports to the UK posted marginal growth during the fiscal under review, according to the country-wise export data released by the Trade Development Authority of Pakistan.

The US remained the top export market for Pakistani goods in the financial year ended on June 30, 2024, with exports totaling $5.286 billion compared to $5.239 billion last year, showing a slight growth of 0.9 per cent.

China followed with imports of $2.559 billion, compared to $2.614 billion, recording a negative growth of 2.1 per cent. While the United Kingdom fell to third place with imports of $2.015 billion from Pakistan during the fiscal against $1.943 billion, showing a growth of 3.7 per cent.

The APBF chairman Ibrahim Qureshi pointed out that administrative measures to curb imports, leading to raw material shortage for the industry and resultantly lower production, were the main reason for the plunge while the slowdown in global demand amid monetary tightening was another reason, he said.

Ibrahim Qureshi said that Pakistan has remained a potential market for foreign investors, who still have plans to make fresh investment in the country, but they have continued to wait for the return of economic stability. He highlighted uncertainty in the rupee-dollar parity as one of the major concerns of foreign investors.

Syed Maaz Mahmood said a slowdown in the economy had badly impacted business confidence. It is must for the authorities concerned to first create an enabling environment for the local businessmen desiring to make new investment. Data shows that textile exports came in at $1.2 billion in February, down 11 percent month-on-month (MoM); however, in rupee terms, exports came in at Rs315 billion, up by 2 percent MoM. Value-added textile exports decreased by 13 percent MoM to $812 million mainly due to lower shipments of readymade garments and knitwear, which declined by 13 percent and 18 percent MoM, respectively, he said. 

The APBF President said textile exports declined mainly due to import restrictions, resulting in unavailability of raw material, coupled with global recession which kept textile demand subdued, he said. Besides domestic issues, there are global reasons as well for the decline in exports that have also impacted other countries. In the first eight months of current financial year (8MFY24), Pakistan recorded textile exports of $11.22 billion, down by 11 percent YoY, while in rupee terms, they were up by 19 percent YoY, while exports of basic and value-added textile declined by 21 percent and 9 percent YoY, respectively.

Demand from major markets, such as the US and Europe, was the key concern among textile exporters, he said. Furthermore, the recent hike in electricity tariffs will pose a challenge to the sector.