KARACHI / LAHORE: The government has presented a picture of the economy far from facts while targets set for the budget 2023-24 also look unrealistic, said FPCCI President Irfan Iqbal Sheikh on Friday while expressing apprehensions that the business community would be looking for “hidden taxes” in the Finance Bill.
The Rs9.2 trillion revenue target not only looks difficult but it will have far-reaching negative consequences. The last year’s target of Rs7.5tr is still unachievable, said the chief of the Federation of Pakistan Chambers of Commerce and Industry.
The economic growth rate was close to 6pc which plunged to 0.29pc this year. “So, how can more taxes be imposed on very little economic growth performance,” he questioned.
The FPCCI chief said the government was imposing new taxes to extract more from already squeezed taxpayers without bringing new people into the tax net.
Unless interest and exchange rates and petroleum prices are stabilised, the economy will not perform, he asserted.
He, however, appreciated some budgetary steps including an increase in loan scheme size from Rs1,800bn to Rs2,055bn for poverty alleviation, duty abolition on solar energy for tube wells and seeds and a 50pc reduction in the tax rate for the youth.
The Information Technology industry has been given the status of SMEs which would certainly lead to the development of IT domestically as well as for exports.
“It’s a budget ‘as usual’ in unusual times. It fails to take the opportunity of fundamental reforms by taxing the un-taxed and under-taxed sectors – wholesale, retail and real estate,” remarked Pakistan Business Council chief executive Ehsan Malik.
He said the budget did not mention steps to harvest data on non-filers and National Data and Registration Authority to widen the tax base besides nothing on stemming under-invoicing.
The government’s claim of ‘no new taxes on industry’ is belied by an increase in super tax and that too is not a fully progressive way, he said.
Counting on some good measures, Mr Malik said the focus on agriculture, especially on seeds and mechanisation is good for promoting IT and IT-enabled exports. The reduction in minimum tax on listed companies is a step in the right direction.
Mr Malik said the tax collection targets look unrealistic and the increase in government salaries and pensions will put pressure on the fiscal deficit. A mini-budget is inevitable.“
Secretary General, Overseas Chambers of Commerce and Industry (OICCI), Abdul Aleem said the budgetary tax measures appear to be an “interim budget” with short-term measures for certain sectors, but lacking in measures to stabilize the economy.
Lahore Chamber of Commerce and Industry (LCCI) President Kashif Anwar said the industry’s demands of competitive energy tariffs and others were not met. However, he termed budgetary proposals good to revive the IMF programme.
“We see this budget as an IT-focused business and agriculture friendly. It is also good that various proposals of the LCCI have been accepted,” the LCCI president said.
He was of the view that special measures should be taken to achieve $30bn export and $33bn remittances in the next fiscal year. “We also welcome the establishment of Export Council in this regard,” he added.
Speaking to Dawn, All Pakistan Textile Mills Association’s Secretary General Shahid Sattar said for the export industry a competitive regional energy tariff of 9 cents means a lot, but nothing was mentioned in the budget to address this issue.
Published in Dawn, June 10th, 2023