Prominent trader bodies and organisations have termed the federal budget for the fiscal year 2022-23 a balanced one amidst the difficult economic situation prevailing in the country.
However, they also expressed their concern, saying that there was some ambiguity in the budget as it didn’t depict the economic stability in future.
Reacting to the budget, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) chief Irfan Iqbal Sheikh said the government presented a balanced budget. He welcomed the removal of sales taxes on seeds and solar equipment and custom duties on agriculture machinery, saying this would help in the agricultural growth of the country. “Imposition of fixed tax was a long-standing demand of FPCCI which has been accepted,” he said and added that this will help towards bringing more people into the tax net.
Sheikh said that the government had withdrawn sales tax on 30 pharmaceutical-related components while FPCCI had suggested abolishing sales tax on all APIs.
He further said that the condition of identity cards has not been removed, and no steps have been taken to reduce the cost of doing business.
The Lahore Chamber of Commerce &Industries (LCCI) president Mian Nauman Kabir welcomed that small retailers will be taxed a fixed amount (Rs3,000 to Rs10,000 as final tax) which would be collected with utility bills. Moreover, he said, withholding tax for import of raw material to be made adjustable, sales tax holiday for local and imported solar panels, reversal of sales tax for tractors, agriculture equipment, wheat, canola and other grains are good measures.
However, the LCCI president said that, as usual, the federal budget is in deficit and it has not mentioned how this would be handled. He feared that the government would opt for borrowing, further aggravating the economic conditions.
Kabir said that around Rs4,000 billion has been allocated for debt servicing which shows how much the economy is paying to the debts. “High economic growth is the best way to reduce the budget deficit because it would also enhance the government revenues,” he said.
He said that a revenue collection target of Rs7,004 billion has been set with an increase of Rs1,400 billion as compared to the previous year. However, he said that it has not been mentioned whether new sources will be found or the existing taxpayers will be burdened.
LCCI senior vice president Mian Rehman Aziz Chan said that the customs duty exemption has been given on more than 30 active pharmaceutical ingredients, which is a good step. He said that regulatory duty on the raw materials of other industries should also be abolished to make them competitive.
LCCI vice president Haris Ateeq welcomed the progressive tax regime. He said that the government is going to introduce a fixed tax scheme for the traders that should be discussed with the stakeholders.
President of SAARC Chamber of Commerce and Industry Iftikhar Ali Malik also termed the federal budget as balanced and mentioned it will help accelerate the economic activities across the country. Commenting on the federal budget, he hailed the epoch-making historic reforms for ease of doing business. He said the remarkable measures announced in the budget would help set a proper direction for the national economy to flourish in the days to come as well as ameliorate a lot of poor segments of the society.
He added that it’s an established phenomenon that the survival of a state mainly rested on a sound economy.
