KARACHI, June 1: Trade and industry expressed its reservations over the Federal Budget 2012-13 proposals presented by Finance Minister Dr Abdul Hafeez Shaikh in the National Assembly on Friday.
Although reluctant to comment before going through the finance bill, business leaders did express their apprehensions about the proposals and felt that the finance minister was unable to present the complete budget speech before the assembly.
The business community was mostly concerned about the lack of incentives in the proposals for attracting fresh local and foreign investments.
With a total outlay of Rs3110 billion, the budget 2012-13 will have a huge deficit of Rs1185 billion on having a revenue target of Rs3234 billion, belying the finance minister’s claim that the budget is carrying no new taxes, some business leaders stated.
Acting president Federation of Pakistan Chambers of Commerce and Industry Sheikh Shakil Ahmed Dhingra speaking to the media said that the federation’s official version will be given after going through the finance bill.
“The comments being given by business leaders are in their individual capacity and the FPCCI does not endorse them,” he informed.
Business and industry leaders who spoke on the occasion were former president FPCCI Iftikhar Ali Malik, S M Muneer, Iqbal Dawood Paganwala, Khalid Tawab, Sulman Agha, Zubari Tufail, Ehtishamuddin chairman Korgani Association of Trade and Industry (KATI), Nseem Vohra and Shakoor Kahtri, Amjad Rafi, Salma Agha and Engg M A Jabbar.
The leaders were critical that the government has once again left the agriculture sector which contributes up to 22 per cent to GDP out of the tax net. Without removing exemption on incomes of any sort, the country’s financial woes will not be over for years to come, they added.
Younus M Bashir acting president Karachi Chamber of Commerce and Industry (KCCI) said that though some of the measuresproposed in the budget 2012-13 are positive, much more needs to be done to give impetus to the declining industrial activity.
“The proposal to reduce maximum customs duty from 35 per cent to 30 per cent would help check smuggling. Also, bringing the sales tax maximum rate at 16 per cent is a step forward but it would have been better if the rate had been reduced to single digit,” he opined.
Fawad Ejaz Khan chairman Pakistan Readymade Garments Manufacturers and Exporters Association (Plgmea) said that the Rs10 billion allocation toward the Export Development Fund (EDF) is appreciable, adding “such commitments were made in the past too and were never fulfilled.”
Similarly, Amjad Rafi, a leading cement exporter said that inland freight subsidy was given on exports of cement, leather and engineering goods. “The SRO was also issued but when claims were filed, a single paisa was not given. Therefore, such commitments at the time of announcing budget have become a routine matter.”
Masroor Alvi chairman F B Area Association of Trade and Industry said that it was too early to give any comments on the budget 2012-13 proposals. “Things would only become clear after going through the finance bill,” he added.
Safdar Makhri chairman Rice Exporters Association of Pakistan (Reap) said that there had been an anomaly for import of grain silos and even after pin pointing the issue no corrective measure has been taken to remove it.
“Though the State Bank of Pakistan funding is available and the Federal Board of Revenue (FBR) has allowed duty free imports of grain silos but due to the anomaly, rice exporters are unable to import silos,” he added.
President Union of Small and Medium Enterprises (Unisame) Zulfikar Thaver termed the budget 2012-13 a ‘mediocre budget’ which was without much substance and a mere effort to balance income and expenditure with insignificant relief to the underprivileged sector the economy.
“The small and medium enterprises sector expected a budget to give incentives for investment to resolve the unemployment issue, bring reduction in inflation and making life easy for the common man but these measures are missing from the budget proposals,” he opined.
However, he appreciated the increase in income tax exemption limit from Rs0.3 million to Rs0.4 million and reduction of 0.5 per cent in turnover tax. Exemption from withholding tax on cash withdrawal from banks from Rs25,000 to Rs50,000 is a positive measure too, he added.
“Reduction in the federal excise duty by Rs100 per ton on cement will also help to ease pressure on housing industry. The proposal to cut customs duty on 28 raw materials imported by pharmaceutical from 10 to 5 per cent will help bring down prices,” he added.
The business leaders were highly critical of the ruckus created by the opposition benches during the brief budget speech of the finance minister and deplored the uncivilised behaviour.