Page 10 - CMA Journal (Sep-Oct 2025)

Exclusive Interview

Lower rates encourage businesses to comply voluntarily rewarding both growth and innovation. At the same
and formalize their operations, which can actually time, it is important to address industry-specific financial
increase overall revenue despite the reduction in the concerns through structured consultation mechanisms
headline rate. A competitive tax regime would also make that regularly capture feedback from stakeholders. By
Pakistan far more attractive to investors, positioning us combining these measures, we can make financing more
favorably against regional competitors like Bangladesh, affordable, stimulate investment, and support
Vietnam, and India. sustainable industrial expansion.
Higher post-tax profits give companies the ability to ICMA: Despite these challenges, what gives you
reinvest in capacity expansion, technology upgrades, confidence in Pakistan’s industrial future and its
and workforce development, creating a virtuous cycle of ability to recover and grow?
growth. At the same time, lower rates reduce the
incentive for aggressive tax planning and avoidance, Dr. Gohar Ejaz: What keeps me optimistic about
improving collection efficiency and helping to Pakistan’s industrial future is the enormous potential our
strengthen the formal tax base. country possesses. We have a large and young
population of over 240 million, offering both a
Such a reform would also encourage entrepreneurship
substantial consumer base and a workforce that can
by improving the risk-reward ratio for starting and
drive growth. Our strategic location, bridging South Asia,
scaling businesses within the formal sector. As
Central Asia, and the Middle East, gives us access to
investment and economic activity expand, the tax base
major trade routes and regional markets, which is a clear
would grow organically, ensuring more sustainable
advantage for industrial expansion.
revenue streams over time. Competitive taxation is also a
critical factor in ease of doing business rankings, which Pakistan also has an established manufacturing base,
directly affects international investment decisions and with expertise in sectors such as textiles, leather, surgical
the overall business environment. instruments, and sports goods. This provides a strong
foundation on which industries can scale and diversify. I
Finally, a phased implementation could offset any initial
am also encouraged by the growing awareness among
revenue impact while simultaneously broadening the
policymakers, the business community, and
tax net. In essence, lowering the maximum tax rate is not
development partners about the reforms needed to
just about reducing rates—it is about creating the
unlock this potential.
conditions for investment, innovation, and long-term,
sustainable growth.
Our agricultural resources are world-class, offering
ICMA: High interest rates remain a major challenge untapped opportunities for agro-processing and
for industries. What measures could make financing value-added industries. At the same time, improving
more affordable and support business expansion? digital infrastructure, including expanding internet
penetration and mobile connectivity, is creating avenues
Dr. Gohar Ejaz: High interest rates have been a
for e-commerce and a digital economy. The Pakistani
persistent hurdle for Pakistan’s industries, limiting their
diaspora also plays a critical role, providing capital inflows,
ability to invest and expand. One approach is to develop
market access, and potential investment partnerships.
alternative financing instruments such as venture
capital, private equity, and leasing options, which can
Regional connectivity initiatives, such as CPEC, are build-
reduce dependence on traditional bank loans. For
ing infrastructure that can facilitate trade and industrial
export-oriented industries, creating export credit
development. Beyond these structural advantages,
guarantee schemes backed by the government can
Pakistanis have a resilient entrepreneurial spirit. Despite
lower perceived risk and, in turn, reduce borrowing costs.
numerous challenges, businesses continue to innovate
Temporary interest rate subsidies for loans used to and adapt, demonstrating remarkable perseverance.
purchase modern machinery or adopt digital systems Finally, our untapped natural resources, including miner-
can encourage technology upgrades and improve als and renewable energy, can provide critical support
productivity. Establishing a robust credit rating for industrial growth. Together, these factors give me
infrastructure for SMEs is also crucial, enabling smaller confidence that Pakistan not only can recover but also
businesses to build a track record and access financing at has the capacity to achieve sustained industrial growth.
more favorable rates.
The Editorial Board thanks Dr. Gohar Ejaz, HI, SI, Former Federal
Linking interest rates to performance metrics can Minister for Commerce and Industries and Chairman, Economic
Policy & Business Development Think Tank for sparing his precious
provide additional incentives. Businesses that meet
time to give an exclusive interview for Chartered Management
export targets, create employment, or adopt new Accountant Journal.
technologies could qualify for preferential rates,
8 ICMA’s Chartered Management Accountant, Sep-Oct 2025