Pakistan is set to follow the Chinese plan of actions to deal with economic crisis amid COVID-19

LAHORE: China has provided tax incentives to ease burden of small entrepreneurs and different plans to get rid of unemployment due to the current global pandemic of Covid-19.

Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) President Zarak Khan revealed this while addressing the Chamber’s think tank meeting here on Tuesday. He said China’s 2.5 trillion Yuan ($351.2 billion) tax relief plan for this year will help ease financial strains and accelerate production recovery of enterprises with key measures like further cuts in the value-added tax rates and social security contributions.

He said the Pakistan government should imitate the Chinese plan of actions to deal with the economic crisis at this hour of need. From January to April, total tax and fee reductions in China reached 906.6 billion Yuan, including 485.7 billion Yuan from the newly-launched measures, the state taxation administration said. The administration will continuously implement the tax and fee cut policies to help small-scale and privately-owned businesses offset economic slowdown risks, said a senior STA official.

Zarak Khan further said that the Pakistani government should also ensure provision of facilities on urgent basis, especially to the documented small businesses and filers who are paying taxes for the last 70 years and are now facing a severe financial crisis due to the prolonged lockdown.

PCJCCI Senior Vice President Moazam Ghurki said that during the business resumption process, the Chinese government decided to reduce or cancel value-added taxes for small-sized businesses in its country. Value-added tax on services, such as public transportation, restaurants and hotels, tourism and entertainment, and culture and sports will be exempted, he said, adding that we should also exempt micro, small, and medium-sized businesses from contributions to basic old-age insurance, unemployment insurance, and work injury compensation insurance schemes.

PCJCCI Secretary General Salahuddin Hanif said tax and fee reductions will reduce the financial strain on companies; especially privately-owned enterprises, as weak economic growth and other novel Covid-19 epidemic disruptions are constraining revenue and profit growth prospects.