ISLAMABAD – Pakistan Business Council (PBC) has termed the annual budget for next fiscal year as the most growth-oriented of any in recent years.
The PBC has thanked Federal Minister of Finance and Revenue, Shaukat Fayyaz Ahmed Tarin for listening to the Pakistan Business Council and reflecting many of Council “Make in-Pakistan” centric recommendations in the budget speech. “Without hesitation, we can Say, that this is the most growth oriented budget, presented in recent times.
According to the PBC, shortage and rising cost of food essentials will be addressed by the resources earmarked in the proposal. This is aligned with the Make-in Pakistan aim of achieving self-sufficiency at least the essentials. Meanwhile, exports are a product of what is manufactured on a competitive basis. The government focus on reviving industry and reducing the cost of inputs through lower tariffs is also aligned with our Make-in Pakistan thrust to reverse the premature deindustrialisation of the country. “In this regard we are also grateful to you for not further burdening industry with the cost of inefficiencies and theft in electricity transmission and distribution,” the PBC added.
It said that export of services, especially IT will benefit from the fiscal changes proposed. The formal sector will achieve a more level playing field from the measures government proposed t0 broaden the tax base, especially with technology and by addressing the talent gaps of the FBR. It has also appreciated the government’s measures in taxation by saying taxpayers will take comfort from the changes proposed in FBR’s powers, the revival of the self assessment system and the introduction of third-party audits. “SMEs, which play an important role in the value-chain of larger companies, will be supported by the initiatives you outlined”.
The PBC thanked finance minister for accepting the proposal to reduce the turnover based minimum tax, exempt SEZ enterprises from it and for the rationalization of withholding taxes. “We appreciate your determination to further phase out and rationalize these taxes”.
It has expressed disappointment that a rational protection against double taxation of intercorporate dividends, provided in many developing and developed countries as well as in Pakistan for nine out of the last twelve years, was not restored. Group formation results in scale, wider shareholding and diversification of investment as well as creation of jobs. This, therefore, needs to be encouraged by removing cascading taxes on dividends from a subsidiary to its holding company. “We request you reconsider this and reflect it in the Finance Act.” the PBC added.
Meanwhile, the Islamabad Chamber of Commerce and Industry (ICCI), giving its reaction to the federal budget 2021-22, termed it as a balanced budget.
President ICCI, Sardar Yasir Ilyas Khan said the government has accepted many proposals of the major chambers of commerce and industry. He said progress and prosperity of the country was dependent on promoting industrialization, adding that the government has reduced customs and regulatory duties on the import of raw materials and goods for many industries which is encouraging step, said a news release.
He said reduction in tax liability by 25 percent for women entrepreneurs was a welcome move and urged that the government to considered similar relief for small and medium enterprises (SMEs).
Yasir Ilyas Khan lauded the reintroduction of the self-assessment scheme for taxpayers as it would give them more confidence and help improve tax revenue. He said deletion of 12 withholding taxes in the budget was a positive move as these taxes were putting extra burden on the taxpayers.
However, he urged the government to introduce a two percent fixed tax scheme for traders to realize the actual tax potential of the country and promote a documented economy.
He urged that the government to take the business community on board and address all their concerns for installation of an additional 0.5 million POS on businesses in the country.
He said high power tariffs in Pakistan were a major cause of high cost of business and suggested to reduce power tariffs in the budget to make industry more competitive for exports.
He hoped that this budget would be helpful in further accelerating the pace of economic activities in the country.
Mian Akram Farid, Chairman, Founder Group termed the overall budget as positive. However, he urged the government to announce few incentives to attract more foreign direct investment in the country.
He said Pakistan has the potential to increase its information technology exports up to USD 8-10 billion for which more concessions for IT industry and e-commerce were need of the hour. He said PM’s construction package has stimulated the economic activity in this sector and urged the government to announce similar kinds of packages for all industries leading the economy towards fast track growth rate. He said SMEs were playing a vital role in the economic development and suggested to announce cheap credit schemes for them in the budget.
He said only 300 firms were contributing 70 percent of tax revenue and urged the government to strive for broadening the tax base through a fixed tax regime. He also stressed the need to focus on skilled development of people to enhance manpower exports.
Senior Vice President ICCI Fatima Azim and another official Abdul Rehman Khan appreciated reduction in capital gain tax from 15 percent to 12.5 percent.
They also stated that relief in FED and sales taxes on locally manufactured 850cc cars and electric vehicles were positive steps, adding, these measures would boost investment in stock market and promote automobile industry. Fatima Azim further urged the government to provide easy credit facility to women entrepreneurs to attract more women towards business sector.