LAHORE-Federation of Pakistan Chambers of Commerce and Industry President Mian Anjum Nisar has termed the recently announced federal budget 2020-21 as status quo and conventional budget, as the bureaucracy has tried to further accumulate its powers through this opportunity. Moreover, the budget provided nothing to run the industry or sustain the country’s exports in post-corona slowdown, besides putting adverse effect on the prime minister’s policy to generate millions of jobs in the country.
Addressing a press conference here at PIAF Office, which was also attended online by the FPCCI office-bearers of Karachi and Islamabad offices, FPCCI president Mian Anjum Nisar called for amendments in budget before the approval of finance bill in the national assembly. He was flanked by the regional chairman Dr Arshad and LCCI former president Muhammad Ali Mian in the press briefing.
He said that the FPCCI’s most of the suggestions were ignored and just few recommendations were incorporated in the budget. He said the mandatory CNIC condition for business transactions of Rs50,000 and above has been creating a lot of problems for the business community besides sending lot of money out of the economy. The government should have abolished this condition in the current fiscal year budget to facilitate the smooth growth of business activities. Instead of abolishing this harsh condition the government just enhanced the limit of transaction amount for CNIC condition from Rs50,000 to Rs100,000. He said that businesses were already suffering huge losses due to the COVID-19, so in these circumstances, government should refrain from imposing conditions that were making it difficult to promote businesses. In the first step the government will have to document the economy then it should implement CNIC condition, he suggested.
Mian Anjum Nisar expressed serious concerns over severe liquidity crunch of the trade and industry both domestic as well as the export-oriented sector owing to non-payment by the international buyers amidst worldwide lockdown due to pandemic, creating a risk of millions of workers rendering unemployed.
He said the financial losses to the trade and industry have been multiplying every day and they were facing severe liquidity crises. He said that with a view to keep the industry live major problem is cash flow which can be resolved through early refunds system, cut in taxes and markup rate.
FPCCI leader observed that the FPCCI was expecting withdrawal of discretionary powers of FBR Chief Commissioners, which are the major hurdles in tax net improvement. By enhancing discretionary powers of the tax officials, the government has further created troubles towards documentation of economy, he added.
He called for immediate rectification of anomalies in the budget by reducing ratio of harsh taxation, in consultation with the FPCCI, which is the elected apex body of the trade and industry.
The FPCCI appeals the government for amendment in the budget to restore the zero-rating facility to the export-oriented sectors, as the withdrawal of this facility had a tremendous impact on the growth and development of this sector.
“We are paying all expenses including wages of workers, markup of loans, power and gas bills and building rentals despite closure of the industry for a long time,” he said.
FPCCI president, however, welcomed the reduction of customs duties on 40 raw materials of various industries, besides lowering this duty on 90 tariff lines from 11 percent to 3 percent in the federal budget 2020-21.
“We appreciate that the government has reduced federal excise duty on cement, which will reduce the price of cement and boost construction activities.” He said that the ratio of income tax in regional countries is very low as compared to Pakistan, which should also be brought to the level of our competing countries. He also called for reducing income tax slabs in line with the trends of the global economies while number of taxes in our country are very high contrary to the rest of world, which is also a major hurdle in the FDI towards our country.
The government allocated Rs1200 billion for the relief measures amidst coronnavirus lockdowns but no financial benefit was given to the trade and industry from these funds except some portion of tax refunds which is laudable move.
He also held the FBR responsible for backtracking from a signed agreement with the retailers of the country where the tax machinery committed to slash down minimum tax from 1.5 to 1 percent and withholding tax on all supplies from 4.5 percent to 1 percent in the budget 2020-21.
FPCCI President asked the PM to take action against those port terminals, which have continuously been violating the government advice to relax detention and demurrage charges at least during the lockdown period.
“FPCCI has continuously been requesting the Ministry of Maritime Affairs to instruct all the port terminals and shipping lines not to charge demurrage and detention during the lockdown period. Now we request for refund of demurrage, detention and other charges to those importers who have paid them to clear their consignments during this period of lockdown.”