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ISLAMABAD: A new report from IFC and World Bank finds that doing business reforms in Pakistan is making it more difficult to do business as the government has increased the profit tax for small firms.
“Doing Business 2012: Doing Business in a More Transparent World” released on Thursday states that the economic reforms being made by Pakistan was making it more difficult to do business.
The report puts Pakistan at rank 105 out of 183 countries. Dealing with construction permits was ranked 104 while the rank of getting electricity was measured at 166. There are six procedures to be completed to electricity connection which takes 206 days.In the global ranking Pakistan was ranked 29 for protecting investors however, registering property ranked 125. Trading across border was ranked at 75; enforcing contracts (154) and resolving insolvency (74).
In 2011 report, Pakistan made registering property more expensive by doubling the capital value tax to 4 per cent. However, Pakistan reduced the time for trading across borders by improving electronic communication between Karachi Port authorities and the private terminals, which have also boosted efficiency by introducing new equipment.
In 2010, business start-up was simplified by introducing a system that allows online registration for sales tax and removing the requirement to make a declaration of compliance on a stamped paper.
The report finds that Sri Lanka implemented the most reforms of any of the eight economies in South Asia, helping to create a better environment for entrepreneurs.
The report assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year, the ease of doing business ranking has expanded to include indicators on getting electricity.
Over the past six years, all eight economies in South Asia have made their regulatory environment more business-friendly.
“Entrepreneurs in developing economies have a vital role in creating economic opportunities,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. “South Asia’s governments have empowered entrepreneurs by implementing regulations that are efficient, accessible, and sustainable, and they should continue to seek avenues for improvement.”
Sri Lanka improves nine places in the global ranking to 89, partly by strengthening investor protections and reducing taxes on business. India, the region’s second top performer in the global survey, climbed seven places to 132. Recently implemented mandatory electronic filing and payment for value-added tax made paying taxes easier for Indian firms.
Among the region’s economies, the low- and lower-middle-income economies of Afghanistan, Bhutan, India, and Nepal also improved business regulations for local firms. Bhutan, rising four places to 142, recently launched a public credit registry and streamlined business start-up while Afghanistan, ranked 160, made it easier for local businesses to get an electrical connection.
New data show that improving access to information on business regulations can aid entrepreneurs. In five of South Asia’s economies, traders have access to relevant documentation requirements online or through public notices. Meanwhile, fee schedules for electricity connections are easily accessible in three economies.
