Proposed economic zones | Pakistan Today

Proposed economic zones

The PTI government led by the Prime Minister intend to new economic zones to encourage small and medium-sized industrial projects with the aim to boost the economy. This idea is commendable, but they must be careful in implementation as many such initiatives in the past have failed. The main reason for the failure is that industrials and businessmen with clout end up taking the plots in such zones. This not only crowds out new entrepreneurs but also used as a tax evasion ploy by the old players. Their intention is to show a profit at units set up in such zones to take advantage of the tax holiday. In many cases they start showing losses in their current units elsewhere in the country and show huge profits in the units at new economic zones, thus avoiding taxes on their incomes. In many cases, the units are not even functioning to capacity but are used to show profits. The result is that new entrepreneurs do not get a chance to try their luck and not much of employment is created either. Worse so, the FBR revenues suffer as taxes are evaded by many through the tax holiday. Many economic zones such as Gudon and Hattar have failed to produce desired results in the past. The Prime Minister needs to pay visits to old economic zones and find out reasons for their failure before he opens new zones. Strict action should be taken against allottees of old zones who never set up proper units in such zones and only used those as a vehicle for tax evasion. The government must put in place a system to ensure that allottees in such industrial zones set up industries as intended to boost the economy. The Prime Minister must realize that thought without action and action without thought was nothing except a waste of money which drives the country to an economic quagmire.

Raja Shafaatullah

Islamabad 



Top