PM’s aide vows ‘firewall’ to protect corporate sector from harassment

KARACHI: Special Assistant to Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan, on Saturday reaffirmed the government’s commitment to protecting the corporate sector from undue harassment by investigative agencies such as NAB, FIA and FBR.

He said a “firewall” would be created, requiring any investigation into corporate entities to first be vetted by relevant bodies such as the SECP, SBP, FPCCI or KCCI.

“We want to prevent arbitrary action against legitimate businesses. This firewall is not meant to protect wrongdoers but to ensure that honest entrepreneurs are not subjected to harassment,” he stated during his visit to the Karachi Chamber of Commerce and Industry (KCCI).

Haroon underscored the need for a robust industrial policy that fosters export-led industrialization, reduces import dependence and builds foreign exchange reserves. “We must prioritise domestic investors before looking outward. Our policies should focus on strengthening local manufacturing capacity,” he said.

He acknowledged the concerns raised by KCCI members, noting, “Most of your issues are valid and well-known. The prime minister is deeply committed to leaving behind a legacy of a prosperous Pakistan, aiming to transform the country into the next Asian Tiger through industrialization. This vision inspired me to leave my business and join public service.”

Haroon opined poor policies and misguided decisions in the previous eras led to the closure of major industries such as steel, paperboard, and textile mills. However, he emphasised that the government is now on a path to recovery, citing the 10 percent reduction in the policy rate as a key step towards economic revival. “We are confident that with declining inflation, interest rates will fall further.”

He also pointed out the reduction in electricity tariffs for both domestic and industrial consumers, and reiterated the importance of rationalising corporate tax rates to ensure regional competitiveness. The PM’s aide announced that a new bankruptcy law will soon be introduced to provide struggling businesses with legal avenues for restructuring and continuity.

Additionally, committees are also being formed for the revival of sick industrial units and other issues that are the top priority of the government.

He revealed that for the first time since the country’s independence, Pakistan will have a comprehensive industrial policy. An internationally reputed consultant has been hired to assist in formulating this policy, ensuring it meets global standards and is tailored to Pakistan’s economic context.

In addition, the Small and Medium Enterprises Development Authority (Smeda) will undergo complete restructuring. He also mentioned that the Ministry of Industries will be restructured and its scope expanded to serve as the central hub for all industrial and manufacturing affairs in Pakistan. This is part of the government’s broader strategy to place industry at the heart of economic planning.

On the issue of access to finance, he said that a committee will ensure that credit facilities are not limited to blue-chip companies but are extended to SMEs and the agricultural sector as well. Equal opportunities for funding are essential for inclusive growth and nationwide industrial expansion.

Speaking on the ease of doing business, SAPM criticised the current system, which requires as many as 350 possible certifications to start a new business, of which most of the NOCs are provincial subject. Addressing the issue of capital flight, he said a high-powered committee will be formed to investigate why Pakistanis are reluctant to retain or bring back their wealth.

Akhtar acknowledged that tax rationalisation remains a major challenge due to constraints from international lending agencies such as the IMF. However, he stressed that meaningful steps can still be taken within the next two years to reduce unnecessary burdens and promote economic activity. He suggested that savings from reduced electricity tariffs could be redirected to further cut power costs and lower corporate tax rates. On international trade issues, particularly US tariffs, SAPM said Pakistan is ready to engage in dialogue. A delegation may be sent to Washington to negotiate mutually beneficial trade terms.

BMG Chairman Zubair Motiwala expressed serious concerns over the ambitious revenue target, pointing out that despite such a high target, the size of the industrial sector remains unchanged, private sector borrowing has stagnated and no significant new industrial ventures have been established.

“This implies that the entire tax burden is being shifted to the existing industries, making it increasingly difficult for them to sustain operations. By imposing super tax and other harsh taxation measures, we are, in effect, crippling our industries,” he warned.

While highlighting the contradictory approach towards exporters, Motiwala stated that while the government claims to support exporters to enhance the country’s export potential, it has shifted them from the Final Tax Regime (FTR) to the Normal Tax Regime. This shift, along with a dramatic rise in the number of tax notices issued in the last two years, reportedly exceeding the total issued in the previous ten years, has created a climate of fear and uncertainty.

Earlier, KCCI President Muhammad Jawed Bilwani, while welcoming the SAPM, highlighted the grave challenges faced by business and industrial sectors due to the exorbitantly high cost of doing business, particularly the excessive taxation. He pointed out that as a result, many businessmen and industrialists have relocated their operations to other countries, including those in the Gulf region, Europe, Canada, Mexico, and Bangladesh. This ongoing exodus has led to the outflow of millions of dollars from the country.

“Many individuals are also transferring substantial funds abroad to acquire foreign citizenships, which is one of the core reasons behind the economic instability we are facing today,” he remarked. “In such a scenario, the government’s pursuit of Foreign Direct Investment (FDI) appears contradictory, especially when local investors themselves are being driven away due to unfavourable business conditions.”