Mr. Irfan Iqbal Sheikh, President of FPCCI, has apprised that the federal budget 2023 – 24 presents an unrealistic picture of the economy, and, therefore, the budgetary targets set in the budget documents are unrealistic as well. Additionally, the business community will look for hidden taxes in the budget.
Mr. Irfan Iqbal Sheikh said that the target of PKR. 9,200 billion revenues not only look difficult, but it can have far-reaching negative consequences. Because last year’s target was PKR. 7,500 billion; which is still under failing efforts to achieve. Last year, the economic growth rate was close to 6%; while this year the economic growth rate has dropped a lot to only 0.29%. So, how can more taxes be imposed on very little economic growth performance?
FPCCI Chief said that what is important to think about at this time is that the government is imposing new taxes; and, at the same time, increasing the tax volume – while not adding new taxpayers and not increasing the tax net. It does appear that the burden will be placed on those already included in the current tax net. Until interest rate, exchange rate and petroleum prices are stabilized, the economy will not perform, he added.
He appreciated that, on account of poverty alleviation, the number of loans enhanced from PKR. 1,800 to 2,055 billion in the budget 2023-24; solar energy for tube wells and duty on seeds abolished. Plus, the scheme for youth is a welcome initiative. Youth have to create their employment and business in that manner as new institutions and businesses are not being formed. A 50% reduction in the tax rate for the youth is also welcome.
The information Technology industry is growing rapidly in Pakistan, and its share in exports is also increasing rapidly. For the benefits and incentives that were announced in the budget, in which this sector will be given the status of SMEs, it will certainly lead to the development of IT not only in the country but also in IT exports.
PKR. 5 billion has been kept for women’s empowerment, which is grossly insufficient; considering the current situation and considering the proportion of women in the population.
FPCCI Chief said that PKR. 1,150 billion have been allocated in the development budget; but, merit and priorities must be well considered in its use and allocation. It has been seen that when the government deficit is increasing, first of all, there is a reduction in the development budget and obstacles in its allocation.
Mr. Irfan Iqbal Sheikh stressed that there is an initiative to enhance services exports; but, the volume of exports of our service sector is not significant. The allocation of PKR. 491.3 billion for infrastructure is a good initiative for which the FPCCI; in its budget proposals; emphasized that there is a dire need for attention on infrastructure.
Mr. Sheikh highlighted that Increase in the support of Real Estate Investment Trusts (REIT) will make it easier to complete the pending projects in the sector.
Allocating PKR. 1,804 billion for defense is welcome; considering the current situation; but, it needs more resources for country’s security. At this time, the country is facing different types of security challenges and terrorism.
Mr. Irfan Iqbal Sheikh said that extending the warehousing period of perishable items from one month to 3 months will facilitate trade. In order to reduce the clearance time, importers have also been given the facility in the current budget that they can go to Adjudication through Custom Computrize System. New measures including rephrase of the definition of smuggling will help prevent smuggling.
He hoped that abolishment of RD on special steel round bar will help the sector growth and bring down prices – which will provide relief to the poor. Removal of RD on equipments of IT sector is a good step; which will support the growth of this sector.
FPCCI is concerned over the extension of exemption of sales tax on erstwhile FATA/PATA for one more year; while the demand was that this exemption should be abolished.