LAHORE/ PESHAWAR - Business community has termed the federal budget for the fiscal year 2020-21 as balanced in the prevailing circumstances.
Trade bodies have welcomed the proposed allocations, saying tax free, growth and export oriented budget would give a boost to the economic activities.
The Federation of Pakistan Chambers of Commerce and Industry and the Pakistan Industrial and Traders Association Front have termed the federal budget 2021-22 as balanced and progressive, as no new tax was imposed on the industry while reducing rate of some of earlier duties.
FPCCI’s Businessmen Panel Chairman Mian Anjum Nisar said that initial impression of the Finance Minister’s speech is that the budget is positive for the industry.
Addressing a press conference here on Friday, he said that the minister, however, did not mention to increase or decrease the prices of electricity which is the real concern of the industry.
Flanked by FPCCI President Nasir Hayat Maggun and PIAF Chairman Mian Nauman Kabir, Mian Anjum Nisar said that presently the real issue of the country is uncontrolled inflation. But the budget also didn’t mention any subsidy for food items or reduction of sales taxes or import duties on edibles and pulses, he said, adding that inflation would be a challenge for the government. He welcomed decrease in Capital Gains Tax from 15% to 12.5%, reduction of Custom Duty, Additional Custom Duty and Regulatory Duty on import of raw materials for the textile sector, hot rolled coil steel sector, pharma sector (more than 350 APIs), footwear sector, cables and other 328 tariff lines.
Mian Nauman Kabir said that government offer of a new Uniform Export Facilitation Scheme, exemption of Federal Excise Duty for food and related consumable goods, cars of up to 850cc, juices and reduction of sales tax for cars up to 850cc are appreciable measures. He said that withdrawal of withholding taxes on cash withdrawal and banking instruments, package for housing, SME support program and fixed tax scheme, Rs100 billion package for uplift of underdeveloped areas are good measures. He said that inclusion of IT in zero-rating sector (offering tax credits, exemption of sales tax) is right decision while measures to control circular debt to be implemented in the next two years which include control on line losses, increasing renewable energy, restructure of private power debt etc is also good step. He said that turnover tax was reduced from 1.5% to 1.25% while government will offer interest free loans for up to Rs500,000 to the industry which will promote the industry.
Lahore Chamber of Commerce & Industry thanked the government for accepting its most of the proposals.
Addressing a press conference, LCCI President Mian Tariq Misbah said that reduction in regulatory duties on raw materials will bring down the cost of doing business.
Flanked by LCCI Senior Vice President Nasir Hameed Khan and Vice President Tahir Manzoor Chaudhry, he said that reduction in regulatory duty will boost competitiveness of the industrial sector. He said that Pakistani merchandise was facing problems in the international market due to high cost but now situation will be better.
“The package is good for the agriculture sector. If problems of farmers are solved, crop production will increase and the country will be self-sufficient in food”, he said.
Other office-bearers welcomed 40 per cent increase in development budget, saying it will boost economic activities in the country. They said that relief to the construction and housing sector will not only benefit and promote construction activities in the country but will also be beneficial for the allied industries. They said that exemption for machinery for setting up plants in the Special Technology Zones is a good step. This will help development of engineering and IT sectors. They said that Rs. 118 billion allocation for refunds to the exporters will solve their financial problems. They said that increase in minimum wages to Rs.20,000 will give relief to the lower class.
“Self Assessment Scheme is commendable”, they said and also welcomed reduction in tax on vehicles. They said that a special scheme should be introduced for the traders as they have suffered heavy loss due to Covid. They said that only Rs. 91 billion allocation for the construction of dams is not sufficient. They said that Pakistan is already facing shortage of water and new dams are need of the hour. They further stated that challenges arose because of COVID-19 but the tax target has been increased. “How target will be achieved”, they raised the question. South Asian Association for Regional Cooperation- Chamber of Commerce and Industry (SAARC-CCI) believed that it was the best possible budget in the wake of COVID-19 pandemic.
President SAARC Chamber and Central Chairman United Business Group (UBG) Iftikhar Ali Malik hailed the reforms for ease of doing business. He said that the measures would help set a proper direction of the national economy to flourish as well as uplift poor segments of the society. He said economic indicators would show an upward trend and GDP growth improve significantly with better remittances.
Appreciating the decision of not increasing power and gas tariff, he said it would ultimately provide solace to businesses community, while incentives would help accelerate the economic activities and boost exports. He said the government has taken extraordinary and bold decisions to meet the challenges posed by the pandemic.
Meanwhile, President of Sarhad Chamber of Commerce and Industry (SCCI), Sherbaz Bilour has termed the federal budget for the upcoming fiscal year as `balanced’ and growth oriented.
Addressing a press conference here on Friday to record his comments on the federal budget, Sherbaz Bilour said implementation of measures announced in speech by Federal Finance Minister Shaukat Tarin will bring in economic growth in the country besides creating jobs for unemployed youth. SCCI president was flanked by former President Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Ghazanfar Bilour, former presidents of SCCI, Riaz Arshad, Faiz Ahamd and Malik Niaz. Sherbaz Bilour also welcomed exemption of Federal Excise Duty (FED) in PATA (Provincial Administrative Tribal Area).
He also hailed relaxation in custom duty on items imported by farming community of the country and said the decision will have positive impact on agriculture produce of the country.
He also commended increase in volume of loans for cottage industry by saying that more youngsters would divert attention on starting of business and commercial activities will increase in the country. SCCI president also appreciated reduction in sales tax on imported of cars below 800 CC, benefiting middle class in purchasing of cars. Sherbaz Bilour said presently budget is good for promotion of industrialization and will have positive impact on economy of the country.