Home National Federal Budget receives mixed reaction from experts

Federal Budget receives mixed reaction from experts

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KARACHI: An economic expert from Karachi Ateeq Ur Rehman commenting on the Federal Budget announced Friday said:
Proposed Rs. 30 billion for combating coronavirus is not sufficient when already Government secured relief on Debt moratorium from Paris Club and ADB, etc. to setup health spending and combat COVID-19 and face the disaster of Coronavirus, which is already painting gloomy picture in Pakistan. Government is required to financially assist those who are developing BSL II / Molecular Laboratories for Boosting COVID-19 Testing Capacities.
Monsoon is approaching, proposed Rs. 20 billion for Health Sector is not a satisfactory amount to provide health facilities during Dengue, Typhoid and Malaria, etc.
Government beside allocating funds for Coronavirus and Cancer should also allocate budget for eradication of deadly disease Thalassemia from Pakistan and other blood disorders, too.
There is not a single non-commercial blood disorder hospital for deprived patients in Pakistan. There is a dire need for such facilities in Pakistan.
No relief or finance schemes being proposed for Small Businesses, traders, manufacturers and vendors.
Pakistan Industry is based on imported raw material, no wave off suggested on sales tax and other taxes on the import of essential raw material in order to reduce the cost of production.
There is a great need for provisioning and reduction in prevailing high energy prices which are adding to cost of doing business and cost of production. Unless it is reduced we cannot meet our 26.2 billion export targets.
Meanwhile, the Union of Small and Medium Enterprises (UNISAME) has expressed thanks to prime minister (PM) Imran Khan, Dr Abdul Hafeez Shaikh his finance adviser , Hammad Azhar federal minister of industries and the cabinet for an SME friendly budget in these difficult times.
President UNISAME Zulfikar Thaver said we are thankful to the PM and his team for accepting our demands of exemption of duties on raw materials, establishment of Pakistan Innovation Fund (PIF), facilitating traders with fix tax and relaxing other conditions.
Thaver said UNISAME appreciates the steps taken by the government despite very difficult times due to fall in revenues.
Thaver said the role of State Bank of Pakistan (SBP) has been very SME friendly and positive steps like rescheduling of loans, finance for payment of wages on low mark-up and other facilities for SMEs have been of support to the sector.
UNISAME experts are deeply concerned about the impact of the Coronavirus (COVID-19) and hope the government and SBP will remain vigilant and monitor the requirements of the sector for finance, leasing, insurance, marketing support and logistics from time to time.
Islamabad Chamber of Commerce and Industry (ICCI) has said that the government has presented a balanced budget in the current difficult situation and hoped that this budget would help in promoting business activities.
President ICCI Muhammad Ahmed Waheed said that the government has reduced the customs duty on 40 raw materials of various industries and reduced the customs duty on 90 tariff lines from 11% to 3% or zero% which is very encouraging.
The government has also reduced regulatory duties on a number of industrial inputs that would hopefully reduce the production cost. He said this while giving his initial reaction on the Federal Budget 2020-21.
Waheed said that the government has increased the minimum threshold of supplies by retailers for obtaining CNIC of the buyers from Rs.50,000 to Rs.100,000 which is a positive move.
He said that the government has also reduced the federal excise duty on cement from Rs.2 per kg to Rs.1.75 per kg which will reduce the price of cement and boost construction activities. He said that the government has proposed some amendments to simplify the withholding tax system which will hopefully benefit the business community. He said that the most welcome step was that despite the difficult financial situation, the government has not imposed any new tax in the budget.
The ICCI president said that Pakistan was in dire need of boosting exports at the moment to revive the troubled economy and therefore demanded that the government should announce better incentives for exports and information technology sectors in order to increase our exports and boost investment.
He said that in view of the current difficult situation, the government has presented a better budget and hoped that the government would include further suggestions of the business community to create a more conducive business environment in the country.
Tahir Abbasi, Senior Vice President ICCI, Mian Shaukat Masood, Naeem Siddiqui, Mian Arif, Muhammad Ilyas, Muhammad Aslam Khokhar, Umar Farooq, Khalid Chaudhry and others were also present on the occasion.
Rawalpindi Chamber of Commerce and Industry (RCCI) while responding to the budget for fiscal 2020-21 said that the budget falls below expectations for the business community.
“However, we welcome that no new tax has been imposed. The revenue target in the budget has been set to 4963 billion,” said RCCI President Saboor Malik. He added, “It is impractical and does not reflect the ground realities. We demand that the government must review its revenue targets.”
The condition of CNIC which was earlier Rs50,000 is now proposed to be extended to Rs100,000. “This was our long standing demand and also agenda point of RCCI 12th All Pakistan Chambers Presidents Conference 2020,” he said.
He said that the chamber had proposed to reduce the sales tax from 17 to 5 percent. “We are disappointed that it was not accepted. It is proposed to enable alternative dispute resolution, ADRC. This was a long standing demand of the Chamber which has been met.”
At the same time, Rs 650 billion have been earmarked for federal PSDP, which is less. It should be increased. Last year, Rs 675 billion were allocated, he added. He said the chamber had proposed to abolish the tax for POS point of sales, but the rate has been reduced from 14 per cent to 12 per cent.
The scheme announced for the construction sector, which was due to expire in December 2020, was demanded by the chamber to be extended. It has been extended to June 2021. This is welcome decision. The demand to update and fully digitize the FBR system was also met.
The rate of advance tax on raw materials has been reduced to 2%. The Chamber had demanded at the 12th All Pakistan Chamber Presidents Conference that the rate should be reduced from 5.5 per cent to 3 per cent. Tax refunds have been issued to address the shortage of capital. This is also a good move. – TLTP