KARACHI: With a hint of disbelief in their tone, business leaders on Friday hailed the “pragmatic” federal budget for 2022-23.
Speaking to Dawn, the chairman of the Federation of Pakistan Chambers of Commerce and Industry, Irfan Iqbal Sheikh, said the budget was less severe than initial expectations from the business community.
“The tax collection target is achievable. The growth target is not out of reach either. But the real challenge will be to reduce the current account deficit, as economic growth still relies on high imports,” he said.
According to Pakistan Business Council CEO Ehsan Malik, the commodity super cycle and devaluation have helped meet the government’s tax revenue target through higher import values. “It allowed the finance minister to limit the impact of additional taxes and find the space to retain some element of growth,” he said.
However, a 5% GDP growth target is “neither advisable nor likely”. Reliance on the commodity super cycle to wane to meet the revenue target is not a sustainable solution, Malik said, noting that mini-budgets remain a possibility over the course of the year. of the next exercise.
He accused the government of lacking the political will to broaden the tax base, noting that the budget already levies a windfall tax on companies and individuals earning more than 300 million rupees, a 3% higher tax. on banks and a cut in payroll tax brackets.
“At least some direction is visible in the taxation of immovable property…import levies need to be rationalized on 400 lines to promote manufacturing. The initial capital expenditure abatement has been doubled and non- registrants will have to pay an advance tax at double the rate hitherto applicable to the purchase of cars of 1,600 cc and more,” he said while highlighting the positive points of the draft budget.
Showing the caution typical of foreign investors, the director general of the Chamber of Commerce and Industry of Foreign Investors, Abdul Aleem, said the budget was “flexible” and would not increase the tax burden for most sectors of the formal economy. “I would say it’s a good budget. Hopefully it will deliver the targeted 5% growth.
Pakistan Apparel Forum chairman Jawed Bilwani said the budget speech lacked detail.
Posted in Dawn, June 11, 2022