KARACHI: With a hint of incredulity in their tone, business leaders on Friday welcomed the “pragmatic” federal budget for 2022-23.

Speaking to Dawn, Federation of Pakistan Chambers of Commerce and Industry Chairman Irfan Iqbal Sheikh said the budget is less harsh than the business community’s initial expectations.

“The tax collection target is achievable. The growth target isn’t beyond reach either. But the real challenge will be to curtail the current account deficit as economic growth always comes on the back of high imports,” he said.

According to Pakistan Business Council CEO Ehsan Malik, the commodity super-cycle and devaluation helped bridge the tax revenue target for the government through higher import values. “This allowed the finance minister to limit the impact of additional taxes and find the space to retain some element of growth,” he said.

However, a five per cent GDP growth target is “neither advisable nor likely”. The reliance on the commodity super-cycle to subside to meet the revenue target is not a sustainable solution, Mr Malik said, noting that mini-budgets remain a possibility during the next fiscal year.

He accused the government of lacking political will to broaden the tax base, noting that the budget taxes the already taxed through a windfall tax on companies and individuals earning over Rs300 million, 3pc higher tax on banks and compression of salary tax slabs.

“At least some direction is visible in taxing immoveable property... import levies are to be rationalised on 400 lines to promote manufacturing. The initial allowance on capital expenditure has been doubled and non-filers will have to pay advance tax at twice the rate hitherto applicable on the purchase of 1,600cc and larger cars,” he said while highlighting the positives in the proposed budget.

Showing the cautiousness typical of foreign investors, Overseas Investors Chamber of Commerce and Industry Chief Executive Abdul Aleem said the budget is “soft” and won’t increase the tax burden for most sectors of the formal economy. “I’d call it a good budget. I hope it delivers the targeted 5pc growth.”

Pakistan Apparel Forum Chairman Jawed Bilwani said the budget speech was short on specifics.

Published in Dawn,June 11th, 2022