ISLAMABAD: Special Investment Facilitation Council (SIFC) National Coordinator Lt General Sarfraz Ahmad outlined a comprehensive economic strategy aimed at reducing Pakistan's corporate tax burden, adjusting interest rates, and establishing a more pragmatic exchange rate framework. Addressing prominent business figures during the Pakistan Business Council’s Dialogue on Economy, Ahmad emphasized the need for an export-led growth model to replace the country's existing reliance on fiscal protection and subsidies.

Ahmad criticized the excessive taxation system that he argued curtails corporate growth, noting that the current effective corporate income tax rate, exceeding 50%, is unsustainable. He advocated for reducing the corporate income tax from 29% to 25% and eliminating the 10% super tax and inter-corporate income tax. The remarks came after recent reports suggested the government was considering similar tax reforms.

He further stressed the importance of lowering interest rates, currently at 11%, to better align with decreasing inflation and reflect economic realities. Ahmad highlighted the challenges posed by Pakistan's shrinking fiscal space and substantial energy sector debt, which contribute to the economic strain.

The SIFC coordinator argued that the current consumption-led and debt-prone growth model is inadequate, urging a shift toward export-oriented growth. He called for consensus among stakeholders on this new economic direction, noting that the export-led pathway is crucial for sustainable development.

Ahmad also addressed the issue of capital flight, observing that Pakistani businesspersons often invest their profits abroad rather than reinvesting domestically. He stressed that both local and foreign investments are critical for economic growth, suggesting a need to double foreign direct investment, particularly in export-focused sectors.

The coordinator pointed out that foreign investment has predominantly been directed towards the power sector, with profits leaving the country. He underscored the need to attract investment that supports sustainable economic growth and discouraged consumption-based foreign direct investment.

The SIFC aims to facilitate foreign investment from Saudi Arabia and other partners, with a focus on projects that align with the country's long-term economic goals. Ahmad concluded by urging immediate action and collaboration among all stakeholders to implement these economic reforms effectively.