OUR STAFF REPORTER KARACHI - The business community of the country has appreciated Government announcement to cut a regulatory duty on 398 smuggling-prone items in the federal budget 2011-12, saying that this move would reduce the smuggling and over invoicing of imported goods under the guise of Afghan Transit Trade (ATT). Terming the federal budget for 2010-11 as good but at the same time unclear for the industry, the business tycoons said that the Government proposal of reducing Sales Tax (GST) from 17 per cent to 16 per cent would benefit the general people. Similarly, the decline in the rate of Federal Excise Duty on local cement sale from Rs700 per ton to Rs500 per ton could have positive implications for the dying cement and the construction industries in the country. It is a wise decision of the government to abolish all special excise duties over the next two years, the industrialists said. The Government can earn billions of rupees in revenue due to slash in regulatory duty as this would document economy and smooth import duty mechanism with improving performance of local manufacturing industry, said Zubair Motiwala, Advisor to Chief Minister Sindh on Investment, Chairman, Council of All Pakistan Textile Associations (CAPTA) & former President-KCCI, He further said it is on record that the ATT has become a main source of smuggling goods into Pakistan. According to FBR, country is losing billion of rupees in revenue each year because of smuggling and under and over invoicing of those commodities/goods entered into Afghanistan through ATT. The industrialists showed concern that how the government would bring the 2.3 million people into the tax net despite the fact that around 0.7 million people have been issued notices from the FBR recently and no considerable outcome of this move has been materialised yet. These were the views of the business community after Finance Advisor Dr Abdul Hafeez Shaikh presented Federal Budget for 2011-12 with a total outlay of Rs 2.504 trillion before the parliament on Friday. Siraj Kassam Teli, Leader of Business Community, Chairman, Businessmen Group & former President-KCCI while talking to The Nation, said the Finance Ministers budget speech indicates that the government is geared up to revive the real economic activity in the country by improving manufacturing sector. The Government is trying to gradually phase out the taxation burden from the industrial sector as earlier there was a double taxation on the cement industry in the from of GST and FED. Now with the reduction in both levies, the industrial sector is likely to improve its performance in the upcoming fiscal year, he said. Saeed Shafiq, President-KCCI said it is very dissertating that the Government has only allocated Rs6.6 billion for the improvement of law and order situation in the budget 2011-12. The allocated amount is very low given a very poor security situation in the country. He said the Government has Rs800 billion budget deficit and it is expected that this deficit would be financed through printing more money and borrowing heavily from the domestic banking system. This phenomenon could increase more inflation, which would result into raise in interest rate and crowding out private investments. In his reaction to the annual budget, Chairman Karachi Wholesaler and Grocer Association, Anees Majeed, said 1 per cent decrease in Sales Tax would provide some respite to the poor people. However, it is not clear that either the Government would announce new taxes on food commodities in near future.