Pre-budget meeting: With fiery replies, Shaikh tames businessmen

By Kazim Alam, The Express Tribune

KARACHI: Federal Finance Minister Dr Abdul Hafeez Shaikh may have been a technocrat when he first took up public office, but his handling of questions from angry members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Sunday proved that he has become a political pro.

Shaikh responded in a patient yet calculated manner to the complaints of FPCCI members in a pre-budget meeting at the Federation House while defending the economic performance of the PPP government.

“The most used, and mostly misused, words in Pakistan are ‘relief’ and ‘common man.’ I know that relief means ensuring economic stability, controlling government expenditures, creating opportunities for the private sector and helping vulnerable segments of society. If it has any other meaning, please let me know,” he said after Pakistan-India Chamber of Commerce and Industry President S M Muneer demanded that the government should provide the proverbial common man with relief in the next budget.

He was aggressive in defending the government on the issue of circular debt. “People who don’t even know how to spell the word ‘circular’ feel free to comment on the topic. If the cost of electricity production is Rs12 per unit, and you want to buy it at Rs7 per unit, please tell me who should bear the difference?” he asked.

“People don’t want electricity. They want cheap electricity. They want to buy gold at the price of silver,” he said, adding that the government had given subsidies amounting to Rs1,000 billion in the past four years to the power sector.

In addition to conserving energy, Shaikh said there were only three ways in the short and medium term to overcome the electricity shortage: borrowing more money to subsidise electricity production, increasing taxes on consumers, or charging a market price that is equal to the cost of production.

Responding to the suggestion that the agriculture sector should be brought into the tax net in the next budget, he said it was impossible for him as federal finance minister under the current constitutional set-up, adding that provincial governments actually imposed the agriculture tax, but their collection should be made efficient.

“There’s good news for you if you’re already in the tax net: there won’t be any new tax next year. But if you operate out of the tax net, we’re going to make you lose sleep over tax evasion,” he said, talking about taxes in the new budget.

In response to the demand that the government should end different rates of sales tax and impose a uniform rate, the finance minister said the business community itself was divided over the issue. “We talked about it, and you promised to come up with a proposal. We’ll welcome your proposal if you agree on a uniform rate.”

Published in The Express Tribune, May 21, 2012.

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