LAHORE: The business community urged the government on Friday to withdraw fixed charges and reduce the number of taxes on electricity bills.
In a statement, the Lahore Chamber of Commerce and Industry (LCCI) leaders said the cumulative impact of escalating electricity costs, fixed charges, and taxes makes it difficult for businesses to stay competitive.
They said that these charges are particularly damaging to the manufacturing and export sectors, which are already under pressure in the global market. The additional financial strain on these industries threatens to reduce production capacity, impact employment and hinder overall economic growth.
They added that they are already facing multiple challenges, including rising inflation. The imposition of fixed charges and increased taxes on electricity bills only adds to the financial burdens businesses are enduring. The government must urgently intervene to remove fixed charges and reduce the number of taxes on electricity tariffs to ease the strain on businesses.
They noted that small and medium-sized enterprises (SMEs), the backbone of the economy, are bearing the brunt of these rising energy costs. As a result, many businesses struggle to maintain operations, and some are forced to reduce their workforce or scale down production. This is negatively affecting job creation and economic output across the country.
They urged the government to reassess the current electricity pricing structure and implement reforms to make it more business-friendly. They demanded the elimination of fixed charges, simplification of the energy pricing system and reduced taxes on electricity bills to support businesses in recovering from the adverse effects of the pandemic.
500bps cut in policy rate
Meanwhile, Rice Exporters Association of Pakistan (Reap) chairman Malik Faisal Jahangir has urged the government to support economic growth by reducing the policy rate by 500 basis points.
In a statement issued on Friday, he said that a substantial reduction in the benchmark interest rate would stimulate economic activities.
“An undue delay in cutting the policy rate is leading to unnecessary loss to the country’s economy, especially when the government is serious about bringing the policy rate down to single digits. A timely action will mark a notable improvement in economic stability and demonstrate the effectiveness of recent policy measures,” he added.
A considerable cut has become the need of the hour as it will help bring bank markup rates back to single digits, making credit more affordable for businesses and consumers alike. Lower interest rates will stimulate investment, boost economic activity, and contribute to the overall prosperity of our nation, he added.
He said the November Consumer Price Index has already reduced to 4.9pc year-on-year compared to 7.2pc in the preceding month.
Published in Dawn, December 14th, 2024
