KARACHI: The Korangi Association of Trade and Industry (KATI) has welcomed the reduction in the tax target for the fiscal year 2024-25, considering it a crucial step to alleviate the burden on the industrial sector. KATI emphasized that such measures would contribute to economic stability and business sustainability.
KATI President Naqi praised the International Monetary Fund’s (IMF) decision to lower Pakistan’s tax target by Rs20 billion. He stated that the reduction of the tax target from Rs12.97 trillion to Rs12.35 trillion is a necessary adjustment given the prevailing economic conditions. With a revenue shortfall of Rs600 billion over the past eight months, this decision will help mitigate financial stress on industries and provide much-needed relief to the business community.
Naqi further stressed that maintaining the tax-to-GDP ratio at 10.6% is a positive indicator, but he urged the government to adopt a broader taxation approach. He recommended expanding the tax net rather than overburdening existing taxpayers. KATI firmly believes that pro-business policies are vital for driving economic activity and fostering industrial growth.
Additionally, KATI acknowledged the projected decline in inflation from 12.5% to 7%. However, Naqi cautioned that the benefits of lower inflation would only be realized if production costs and raw material prices were stabilized. He urged the government to ensure price controls and policy consistency to maximize the advantages of this economic shift.
KATI also advised against the introduction of new taxes or mini-budgets, as these could reverse the positive impact of the reduced tax target. Naqi reiterated that while maintaining the development budget is crucial, any spending cuts should be carefully planned to prevent disruptions in industrial output and exports.
In conclusion, KATI expressed optimism that ongoing IMF negotiations would safeguard Pakistan’s economic interests. Naqi urged the government to implement comprehensive tax reforms that incorporate untaxed sectors while ensuring that the existing business community does not face additional financial strain. KATI remains committed to advocating for industry-friendly policies that support economic growth and stability.
