KARACHI, Jan 4: Adviser to the Prime Minister on Finance Shaukat Tarin has stressed the need for bringing all kinds of income under tax net to ensure high rate of economic growth.

“We need 15 per cent tax-GDP ratio to maintain economic growth at around 7 per cent. If we want more economic growth, we will have to tax every income,” he said.

Addressing members of the Korangi Association of Trade and Industry (Kati) on Saturday night, he assured that no tax official would harass any industrialist or taxpayer.

Mr Tareen said he had directed the Federal Board of Revenue (FBR) authorities to rush to Karachi and address complaints of businessmen about customs, especially the demurrage issue, at seaports.

He agreed to a proposal that the Karachi Electric Supply Company should be divided into two or three distribution companies to improve its management.

He noted that the KESC had continued to suffer losses of billions of rupees every year even after its privatisation.

“The KESC is getting just free power supply from the government. Even then it has failed to deliver.”

He said that a meeting would be held in Islamabad on Jan 5 to discuss important issues, including the KESC, and to take decisions to provide some relief to industry and public on various accounts.

The adviser said that the government was working out plans to resolve issues like supply and gas and electricity tariffs.

He said that a new policy based on equalisation of gas and electricity tariffs for all categories of consumers would be announced soon. The step would reduce burden on the industry of subsidies being given to other consumers. It would also lower the cost of doing business for industrialists, he said.

“I strongly believe that all consumers should pay the same price of electricity and gas,” he asserted. “If the government wants to provide some relief to any category of consumers it should give subsidy directly to them.”He said that the government would soon take important decisions about gas and power to the satisfaction of business community.

He said work on formulating a national industrial policy had been initiated and the process would be carried out with maximum participation of the business community.

Mr Tarin said that due representation of the community would be ensured on the boards of all policy-making government institutions, including the FBR, National Electric Power Regulatory Authority (Nepra) and Oil and Gas Regulatory Authority (Ogra), to make the system more practical and targeted-oriented.

The government’s main focus was to strengthen the manufacturing and agriculture sectors which had great potential to grow and diversify, he said.

The adviser said all options and resources were being used to reduce the rates of inflation and mark-up to single digit.

When business leaders pointed out that banks had been earning undue profits with spread up to 7 per cent for a few years, Mr Tarin suggested that the issue would be settled through interactive meetings between bankers and the business community to the satisfaction of all stakeholders.

“I would like to request bankers to provide maximum relief to businessmen and public,” he said.

He said the core inflation was coming down and when the data for Dec 2008 would come out, there would be a significant decline in the rate.

Talking about the high mark-up rate, he said he would arrange meetings of trade representatives with the State Bank governor. The meetings would provide a platform to convince each other so that the banking policies won the confidence and support of businessmen, he added.

Mr Tarin said he would not support a tight monetary policy at a time when oil and food prices were coming down.

He assured the association’s leadership of his full support in setting up the proposed S. M. Muneer economic university in Karachi.

The association’s chairman Mian Zahid Hussain, patron-in-chief S. M. Muneer and senior businessman Abdul Haseeb Khan also spoke.—APP