KARACHI- Siraj Kasam Teli, a leader of business community, has urged the government to withdraw one per cent increase in Sales Tax and 35 per cent L/C margin. According to him, overall budget carried nothing to attract investment, boost industrial production, increase exports, and reduce cost of doing business. Increase in sales tax from 15 to 16 percent will have negative impact on cost of production resulting in increase in prices of all items, thus absorbing 20pc increase given in salary of govt employees. The overall impact of one percent increase in sales tax is calculated at Rs.75 billion. He said that industrial sector of the country was losing its competitive edge in the world market due to high cost of doing business. Teli noted that a new return for sales tax has been prescribed which demands information of unregistered buyers. He observed that in the past also this kind of exercise was undertaken but could not be implemented. He was of the opinion that at this point in time where we are faced with severe economic crises and GOP has set target lower than last year for the growth of the industry, in these circumstances, this kind of action can prove to be backlash and, therefore, it should be deferred for better time and he also mentioned that in order to register every one in the trade is the responsibility of government of Pakistan and at the first stage this register every one in the trade and than after this kind of a return may be prescribed. Teli noted that value added textile sector get R&D support, however, in the budget there was no indication whether the support would continue during fiscal year 2008-09 or not. Likewise, there was nothing about export refinance scheme in the budget, he urged the government to continue the scheme in fiscal year 2008-09. The leader of business community criticized imposition of 10 percent withholding tax on industrial electricity consumption bills saying this would have negative impact on industrial production. He said there was no incentive available for establishing new industrial units in the country. 90 percent incentive was given only to those investors who establish units in rural areas, he added. However he appreciated enhancing duty on 300 luxury items, removal of 5 percent duty on crop insurance, increase in basic pay and pension of government officials, Banazir income generation programme, zero rated duty on energy savers etc. Teli proposed that only finished and value added leather goods' export should be allowed as no country exports its raw material and creates its own competitors, commenting on increasing federal excise duty fro 5 to 10pc on banking and insurance companies, he said it would have negative impact on insurance. He said that the budgetary targets are unrealistic and might not be achieved. He also saw several mini budgets coming in near future. He said all incomes from trade, business and agriculture to be taxed and all transactions to be documented. Most of the business leaders belonging to Karachi Chamber are disappointed, frustrated and even angry on being heaped upon with what many said unbearable burden of taxation and levies in GST rate from 15 to 16 per cent which will push production cost up and put consumers under more stress. 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 salient 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. One per cent increase in GST will cause a minimum impact of Rs. 70 billion on the national economy and hurt everyone from industrialist to consumers.