KARACHI, June 12: President of the Federation of Pakistan Chambers of Commerce and Industry Tanveer Ahmed Sheikh wants all incomes -- from trade, business and agriculture -- to be taxed and all transactions to be documented though he believes that all trades are speculative.

The FPCCI chief was reluctant on Thursday to declare bulk of stock exchange transactions to be “speculative and manipulated” and he took refuge behind a general principle that all trades are speculative. “Speculation can be negative or positive,” he answered when told there were hoarding, manipulation and many other bad practices associated with speculative trading.

Most of the business leaders are disappointed, frustrated and even angry on being heaped upon with what many said ``unbearable burden of taxation and levies’’ in the federal budget for 2008-09. “An across-the-board increase in GST rate from 15 to 16 per cent will push production cost up and put consumers under more stress,” Tanveer Sheikh complained.

Then there is fear of retaining 35 per cent margin on imports and possible discontinuation of research and development (R&D) subsidy on textile export as budget is silent on these issues.

Adding salt to injury is the fact that real money minting sources -- stock exchange, real estate transactions and agriculture -- have been kept out of the tax net or if there are some levies these are mere eye wash and of cosmetic nature.

Like many other businessmen, the FPCCI chief avoided a direct comment on keeping off the stock exchange transactions from taxation and documentation in the federal budget for 2008-09 presented by Finance Minister Naveed Qamar on Wednesday in the National Assembly, but expressed his disappointment on sparing a few rich income generating sources from the tax net.

In the post-budget press conference on Thursday, after the managing committee of the FPCCI discussed the budget proposals, the journalists were more than keen to know how business leaders react to further extension of moratorium for two years from capital gains tax given by the PPP government.

“We were certain of stock exchange coming under capital gains tax till a week before the presentation of budget,” the FPCCI chief said while recalling meetings of business teams with the government at various levels to discuss the budget. What happened in one week, that preceded the budget presentation, is beyond comprehension of the FPCCI chief.

Two premier trade bodies, the FPCCI and the All Pakistan Textile Mills Association (Aptma), held on Thursday the meetings of their respective managing committees and then briefed the journalists of the impact of budgetary proposals on investment, production, export, consumers and on employment

Aptma chairman Iqbal Ibrahim expressed the hope the textile exports will continue to receive assistance of reach and development subsidy in the next fiscal year though the budget of 2008-09 is quiet on it.

“The last year’s budget was also quiet on the subsidy issue but the textile exports received this assistance for the whole year,’’ he recalled and hoped that the Textile Policy or Trade Policy to be announced in near future may say something about this issue.

The Aptma chairman claimed that Pakistan’s textile industry had potential to net in $20 billion export proceeds in next five year and $40 billion by 2020 if necessary policy support is given. “Eight of our textile items are on top of world export business,” he said. Even in the current fiscal year, textile export is close to target in face of all difficulties and problems, he added.The budget, he said, focuses on agriculture and manufacturing, which is a happy diversion from the previous policies. But he was non-committal when asked to give his assessment of the impact of budget of 2008-09 on investment, production and export.

Iqbal Ibrahim wanted to give a five-year economic development road map in the budget for 2008-09, which would have enabled the businessmen to draw up their strategies to make their business growth compatible with government policies.

Unlike Aptma, the FPCCI was blunt and was bitter in expression. “More than 70 per cent of the proposals given to the government were not considered at all,” Zubair Tufail, one of the vice presidents of the FPCCI remarked. Those proposals, which were accepted, pertained to levying a few duties and taxes.

“The FPCCI offered 41 proposals for the budget,” a document circulated in the press conference announced. Of these 41 proposals, thirty five were for investment promotion, 25 for containing inflation, 22 pertained to employment generation, 12 stipulated income distribution, 32 for improving efficiency, 19 related to buoyancy, 9 for broadening base of revenue and 17 for high revenue feasibility.

“The budgetary measures announced on Wednesday have disappointed the businessmen,” the FPCCI paper says while pointing out that the budget belied the impression given by the Federal Board of Revenue and finance ministry in several pre- budget meetings with the FPCCI teams.

“We have constituted a Task Force of businessmen that is carrying out an analysis of the budget,” the FPCCI chief announced adding that the FPCCI will meet the government to discuss main issues to be picked by the task force. “But we are certainly raising the issue of increase in GST from 15 to 16 per cent across the board with force with the government,” he disclosed.

One per cent increase in GST will cause a minimum impact of Rs70 billion on the national economy and hurt everyone from industrialists to consumers.

Tanveer Sheikh conveyed in many words that the government may be forced to bring a mid-term budget if there was an outcry on mass scale against its harsh measures.