KARACHI, June 7: An overwhelming majority of business leaders have hailed the 2003-04 budget presented by the Finance Minister Shaukat Aziz on Saturday calling it “investment friendly focussing on growth” but Mian Nasser Hayat Maggo, President of the Karachi Chamber of Commerce and Industry is the only odd man out who bluntly blamed the economic managers of failing to address the problems of many sectors.
“I am not satisfied with the budget speech of finance minister as it does not come up to expectations,” he told a press conference at the KCCI on Saturday, immediately after the budget speech.
He criticised the government of turning a deaf ear to the most pressing demand of businessmen regarding abolition of five per cent duty on machinery imports. The finance minister has just not mentioned any thing about it.
The speech also lacked any concession or incentives for the Information Technology sector. There has been no policy outline on the privatization process of various sectors, he said.
“There is virtually no incentive for exporters in the budget,” he said while referring to prime minister, Mir Zafarullah Khan Jamali and Federal Commerce Minister, Humayun Akhtar Khan assurances that an export-oriented package would be announced.
He said the problem relating to Duty and Tax Remission on Export (DTRE) has not been solved yet. However, abolition of withholding tax regime and single tax audit in one year are commendable steps.
He said the budget would hardly encourage foreign investment in Pakistan as no incentives have been offered to the prospective investors. The government has attracted only $1.5 billion direct foreign investment in the last three years.
The decision to lower the import duty on 1,800cc vehicles was described as an eye-wash. “The government should have curtailed the import duty on 800-1, 300 cc cars and motorbikes in order to provide benefit to the common man.”
He said the government has projected an increase of Rs510 billion in revenue collection in this fiscal as compared to Rs450 billion. The finance minister has claimed that there are no new taxes in the current budget. “From where the government will recover the balance of Rs60 billion in taxes if compared with last year collection and in view of no new taxes imposed in the current budget. It means that there are definitely hidden taxes to be levied later. The government should announce as to where it has imposed new taxes to recover Rs60 billion in new fiscal year,” Maggo said.
He said there is no need to encourage Smeda and SME Bank as both the organizations do not maintain any liaison with the business community.
The chairman, Site Association of Industry, Haroon Farooqui has termed the budget quite encouraging by saying that “the budget is so far so good in view of the speech of finance minister.”
He welcomed the steps regarding Wealth Tax abolishment, one year sales tax audit, incentives for construction and housing sectors and package for small businessmen.
Former chairman Site Association, Zubair Motiwalla termed the budget as a “camouflage budget.” He said the finance minister has not mentioned as to how the government would recover the Rs810 billion revenue without pointing out any steps for generating revenues from the sales tax and income tax.
Patron-in-chief, Korangi Association of Trade and Industry (KATI), S.M. Muneer, chairman S.M. Naseer, ex-chairman, Shaikh Manzar Alam and senior vice chairman, Mian Zahid Hussain in a joint statement termed the budget as business and investment friendly and also export-oriented.
They said the new system for sales tax refund will address the problems of exporters. They said the budget has covered major areas like poverty reduction, human resource development, enhancement of agricultural productivity, employment generation and fostering economic activities through development of mega projects. “Budget can be termed as pro poor and export oriented,” they added.
The chairman, Pakistan Small Chamber of Commerce and Cottage Industry (PSCCI), Bashir Miandad termed the overall budget as business-friendly. He, however, said that the retailers have been given exemption on Rs2 million turnover followed by two per cent exemption on Rs2 million to Rs20 million as against association’s request of 75 per cent exemption on turnover.
The chairman, All Pakistan Paper Merchants Association (APPMA), Abdul Majeed Memon said that the paper and book prices would fall following abolition of excise duty on paper and paper board.
The chairman, All Pakistan Motor Dealers Association, H.M Shahzad and chairman Pakistan Motorcycle Importers Forum, Sabir Shaikh have criticised the finance minister for not cutting import duty on cars and bikes.