CAP chief Tariq Rana says restriction to mount up economic uncertainties
Islamabad
The Chainstore Association of Pakistan (CAP), the certified trade body of organized retailers in the country, has denounced the undue impediments on retail trade to 8.30 pm.
The CAP further sensitized the government that the restriction was not doable nor would serve any purpose; rather would mount up economic uncertainties. At the time of the first announcement in December to restrict retail timings to 8 pm, CAP had proposed year-round timings for the retail sector to create an equilibrium between energy conservation and economic activity. In official letters to the Ministry of Energy, the body had reiterated its proposal to fix timings to 10 pm for the whole year, apart from the festivals and special events.
The savings estimate of Rs 5 billion per month (Rs. 62 billion annually) appears to be short-sighted because restricting peak hours of business between 7 and 10 pm is expected to result in over 25% drop in turnover of affected retailers and allied industries, employment, and tax revenues. Retail trade contributes above Rs. 12 trillion ($58 billion) to the annual GDP and employs over 10,000,000 people directly. Therefore, such a big shock will cut at least Rs. two hundred fifty billion per month in economic activity or 50 times the claimed savings in energy. Resultantly, over Rs. 50 billion in tax generation per month will be compromised at a time when the state is trying to boost much-needed taxes. The CAP also pointed out that the Government earned more from the commercial unit consumed by the malls.
While speaking to the media regarding the latest announcement by the Federal Government, the CAP Chairman, Tariq Mehboob Rana, griped that Govt. never consulted the sake holders before imposing such an imprudent decision. Such decisions have to eventually be reversed due to pressure from the various affected businesses and trade bodies. With broad-based consultation with stakeholders Govt. can make better & sustainable decisions. Retailers and many other businesses can turn off up to half their lights for the entire day and save much more energy”, Tariq said.
“Why do we compare ourselves to Western countries when their climate, market dynamics, and consumer behavior are different from ours, Rana questioned. In similar Asian cities, such as Dubai, Bangkok, Jakarta, Kuala Lumpur, and Mumbai, the high streets and shopping malls are usually shut by 10 or 11 pm, leaving the festivals. Chain stores do not wish to keep their shops late into the night on a regular basis because it is not productive to do so. Instead of irrational curtailing timings, retailers and many other businesses can turn off half their lights for the entire day and save much more in return.
The commercial sector only consumes 7% of the total electricity at the highest tariffs, approximately Rs. 65-70 per unit (including taxes). Chairman CAP claimed that many large stores and shopping malls have already installed solar energy and are utilizing energy-efficient lighting and cooling/heating technologies. Our points-of-sale are directly connected with the FBR, and we are documenting all our sales and purchases while paying 20-25% of our gross turnover in the form of GST, income tax, etc. Tier-1 Retailers are the Government’s best customers but are being treated like the worst, said the Chairman of CAP.
He pointed out that, during the current economic crisis, retailers were already struggling due to the exorbitant cost of doing business and the reduced purchasing power of the public.
Such bad decisions are likely to cause mass bankruptcies and layoffs due to repeated economic brunts and on-and-off restrictions over the past 3 years. Rana demanded uninterrupted time until 10 pm. At least tax-compliant integrated Tier-1 retailers should be allowed til 10 pm. Retailers are ready to save consumption by 30% by reducing lighting and air-conditioning in stores. Retailers can use all their media resources under CSR to influence the public for energy conservation.
