LAHORE/RAWALPINDI - The representatives of business community have termed the federal budget 2013-14 an inflationary budget, as no relief was announced for public or industry. On the other hand, zero-rated facility has been withdrawn, besides increasing sales tax which will not only enhance inflation but also raise cost of doing business in the country.

Pakistan Tanners Association central chairman Agha Saiddain said that increase in sales tax will encourage under-invoicing, lead to drop in custom duty. He said that country is already facing fiscal deficit but the government instead of giving any roadmap to enhance exports to bridge the deficit has withdrawn incentives.

Syed Nabeel Hashmi, chairman All Pakistan Business Forum, said that direct tax on agriculture income has been once again ignored which is not right, as all sectors of society need to be in the tax net without any exclusions. He said that power projects have been announced but no direction as to the power policy or pricing has been revealed. Further controls for theft and power losses remain the same. No roadmap has been announced to provide relief in electricity loadshedding, which is a serious cause of concern for all.

APBF also hopes that no new mini budgets will be announced in the foreseeable future, he added.

Pakistan Poultry Association’s former chairman and spokesperson Abdul Basit also termed the budget as inflationary, saying the poultry farmers cost will increase at least by Rs5-10 per kg as duty relaxation has been withdrawn besides raising sales tax.

He said that cut in circular debts in record 60 days, completion of Nandipur Power project, allocation of sufficient funds for energy sector would definitely help in solving the energy crisis.

Basit said that austerity measures like bringing down Prime Minister office expenditure by 45 per cent, abolition of discretion funds of federal ministers and ban on purchase vehicles for government functionaries and ban on duty free import luxury vehicles for VVIPs would help increase government revenues.

All Pakistan Textile Mills Association Punjab Chairman Shahzad Ali Khan said that present govt had little time to give any solid programme. Opposing the huge allocation for PSDP, he said that the money should go to power sector as constructing mega dams is a must for revival of economy. Industry demands no incentive, he said and added only smooth power and gas supply should be ensured to achieve growth target.

The Pakistan Association of Automotive Parts Accessories & Manufacturers vice chairman Usman Malik, opposing the new government’s allowing of duty-free import of hybrid cars on excuse of saving fuel bill, has warned the authorities of embarking on repeating mistakes, as the scheme would only benefit a few and have a shocking impact on domestic auto industry as well as the national exchequer. “The govt should have rather encouraged local manufacturing of hybrid vehicles which will result in technology transfers, skills development and real savings in foreign exchange and oil import bill,” he said.

Usman added that increase of registration tax on local vehicles will increase price of cars thus reducing production.

Rice Exporters Association vice chairman Samee Ullah Ch said while the reduced fiscal deficit target of 6.3 per cent is encouraging, the REAP does not understand as to how the govt will be able to achieve revenue growth of over 22 per cent with a GDP growth of 4.4 per cent and inflation of 8 per cent.

Overseas Investors Chamber of Commerce and Industry said it appears that the opportunity of tax reform has not been availed by the new team and instead the government has resorted to old tactics of taxing the already taxed at higher rates. Increase in sales tax and turnover tax will impact all our (OICCI) members negatively and we (OICCI) find this discouraging for future investments.

APAT general secretary Naeem Mir said that the finance minister Ishaq Dar has not fulfilled his commitment of imposing wealth tax, rather he relaxed duties on hybrid cars to benefit the wealthy people. He rejected increase in turnover tax and levies on retailers.

The Lahore Chamber of Commerce and Industry (LCCI) termed the Federal Budget 2013-14 a well thought-out economic revival plan. Addressing post-budget press conference, LCCI President Farooq Iftikhar said decision to eliminate whopping Rs 500 billion circular debt in just 60 days, an allocation of Rs 225 billion for energy projects and completion of 425MW Nandipur Power Project in 18 months would not only help ensure uninterrupted supply of electricity but would also give boost to economic activities in the country.

The LCCI president said that transparent privatization of loss-making Public Sector Enterprises (PSEs) and appointment of competent professional managers in under-performed institutions was a long standing demand of the private sector therefore the decision would help bring in much-needed foreign investment.

Restructuring of trade and industry related government institutions including Federal Board of Revenue and decision to end SRO culture would help bridge public-private sector trust deficit. Ten year tax holiday to the Special Economic Zones and decision to establish new industrial estates in all the provinces would help create jobs for the unemployed youth besides accelerating the process of industrialization in the country.

Construction of Express Way from Gawadar to Kashgar and Rail linkage from Gwadar to Afghanistan would turn the country into a trade corridor in the real sense of the word.

One thousand colonies comprising 500000 housing units would not only provide shelter to low income groups but also gear up activities in allied industries.

The LCCI president also appreciated the Federal government for announcing Pakistan Railways revival plan and to run it through a well designed Board of Directors. The local businessmen on the platform of Rawalpindi Chamber of Commerce and Industry (RCCI) Wednesday rejected the first budget of PML-N-led federal government, saying new elected government has failed to fulfill its promised made during electioneering.

The traders also rejected the one per cent increase in general sales tax (GST) and termed that there was no incentives for business community. "Overcome the circular debt in two months is a good promise but how it will be possible for the new government to end it in such short span of time as previous government had failed to curb it in five years, assurance is good but how it will be done is yet to be unidentified," said RCCI Acting President Pervaiz Ahmed Warriach here at the Chamber.

On the occasion, RCCI Vice President Nadeem Rauf, Group Leader Najamul Haq Malik, former presidents, representatives of trade associations and other members of the Chamber were also present. Warriach said that a government suggests some steps to enhance tax base but at the same time increasing tax ratio is beyond comprehension. Business community is at cross roads and does not know whether or not the government would be able to fulfill its promises, he said.

The acting president said that there was nothing for salaried class in the budget. He demanded that the government should come with solid plans to reduce the concerns of masses. He appreciated some projects like loans for young unemployed persons at lower interest rate.

Anjuman Tajran Rawalpindi President Sheikh Sadiqque told that the increase in the sales tax will result in price hike. "The government allocated Rs 225 billion for the energy generation which is very low and it had to increase it to Rs 500 billion because the business will not run due to energy crisis," he said.

He suggested that the allocation of money for laptops and money saved from Prime Minister House expenditure should be spent to improve the electricity generation in the country.

Our Staff Reporter from Karachi adds: Former president of Karachi Chamber of Commerce and Industry Mian Abrar Ahmad expressed concern over 1 per cent increase in sales tax but appreciated the budget 2013 as a whole.

Increase of 1 per cent in sales tax must bring the price hike but if we saw in a broader context that is necessary for the betterment of country.

H M Shazad, Chairman Car Dealers Association, said the proposed budget is good enough and, if implemented, can bring a good change. Shazad said the law and order situation in the country especially in Karachi is badly affecting the trading activities and government should focus on it. He said the past experience of the hybrid cars shows that is a very expensive vehicle. And the 660 cc imported cars are petrol and budget friendly they can play a vital role to control the petrol and CNG crisis. He said as per the budget proposal given by the business community government can save revenue of Rs 50 to 60 billion.

The Union of Small and Medium Enterprises (UNISAME) appreciated the increase in tax holiday period from 5 years to 10 years for Special Economic Zones (SEZ), the exemption of import duties on alternate energy systems and reduction of taxes from 35 to 30% and said these are very positive steps.

President UNISAME Zulfikar Thaver said we had proposed 0% duty on alternate energy devices and enhancing the scope of SEZ and streamlining the FBR and are happy that the FM has advised broadening the tax net, simplifying the procedures and increasing efficiency for better tax collection.