The businessmen’s perspective on the budget | Political economics

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he federal budget presented on June 10 was not as harsh as feared, even though the situation called for higher taxes and tough measures against tax evaders.

Although the finger is regularly pointed at those who pay no tax, tax evasion, even by taxpayers in good standing, is also very high. Many companies import goods citing lower prices to steal 40-80% of the duties owed. Many manufacturers under-report their production and save huge amounts of sales tax and income tax. Governments are looking the other way, to maintain “investor confidence”.

After almost every budget, some businessmen praise the government’s efforts in the media but complain in private, especially if taxes have been raised. They generally have no problem with higher import duties on luxury items. They continue to use luxury cars and luxury goods, even at higher prices, because the majority of them generate more money by passing on the impact of taxes imposed on them to end consumers.

The federal government has raised the corporate tax rate and imposed a 10% higher tax on the banks, but we hear no complaints, although the banks have raised this issue in private meetings. The business sector is unhappy with the additional tax imposed on them. Their claim is that they already pay high taxes. They ignore the fact that their income is increasing dramatically every year.

The companies welcomed the government’s decisions regarding the payment of Rs 40.5 billion reimbursement claims and sales tax declarations to traders and industrialists. This is a huge amount and releasing these funds will improve their liquidity. The abolition of customs duties on agricultural machinery has also been appreciated by commerce and industry.

It is unlikely that the full benefit of tariff removal will be passed on to farmers. The sales tax exemption for solar panels was also welcomed by all.

The introduction of the Alternative Dispute Resolution System will allow businesses to settle their disputes with the Federal Board of Revenue. The committee will be composed of a member of the FBR and the disputing party. The two will choose a third member. The majority decision will be binding. Businessmen hailed the tax dispute resolution mechanism.

Shortly after the presentation of the budget, most traders and trade associations welcomed the introduction of a fixed tax regime of Rs 3,000 to Rs 10,000 for small retailers. They said it would not help broaden the tax base and increase revenue.

A marble industry representative said that a fixed tax was also levied on the marble industry and linked to their electricity bills. It was withdrawn by the previous government. He demanded the reintroduction of a fixed tax system for the marble industry. He said that the government had taken a good decision in allowing tax adjustment at the import stage. He said the government should now take action to reduce the consumption of petroleum products.

The KCCI described the 2022-23 federal budget as pro-public and pro-business. Chairman of KCCI Businessmen’s Group Zubair Motiwala and Chairman of KCCI Muhammad Idrees Memon welcomed the government’s announcement to pay all pending duty refund claims on taxes and local samples..

Businessmen appreciated the government’s effort not to burden them despite the need to impose new taxes. However, this is not true. The increase in the prices of petroleum products directly affects the common man.

The increase in transport costs will result in an increase in all goods and services. At the same time, electricity tariffs are expected to increase by almost Rs 9 per unit. Gas prices will also be increased by 4% from July 1. Utilities may consume more resources in some households than food expenditures.

Economist Dr Aliya Hashmi says the budget is balanced. She says the IMF is opposed to block grants, but the government has provided targeted grants to the poor.

Deputy Chairman of the Pak-Afghan Joint Chamber of Commerce and Industry Zia-ul-Haq Sarhadi said the federal budget was relief-focused and struck a balance. He appreciated the removal of taxes on the installation of solar panels and says he hopes it will help people cope with power outages.

The Karachi Chamber of Commerce and Industry has described the federal budget as pro-public and pro-business. KCCI Businessmen’s Group Chairman Zubair Motiwala and KCCI Chairman Muhammad Idrees Memon in their statements welcomed the government’s announcement to pay all pending tax duty refund claims and local levies.

The Rawalpindi Chamber of Commerce and Industry called the fiscal budget balanced and commendable in a difficult economic environment. RCCI Chairman Nadeem Rauf, speaking after the budget speech, said the fixed tax regime for small traders will help widen the tax net.

Pakistan Businesses Forum (PBF) Vice President Ahmad Jawad criticized the federal government for doing “too little, too late” in terms of creating fiscal space for the agricultural sector. He said, however, that the reduction in duties on industrial raw materials will help reduce the cost of doing business. The revenue target, he said, was achievable. He also praised the self-assessment system and expressed hope that it will reduce blackmail.

United Business Group spokesman Mirza Ikhtiar Baig said the federal budget was good in the current circumstances. He noted that efforts have been made to support some of the neglected sectors, including IT and SMEs.

SAARC Chamber of Commerce and Industry President Iftikhar Ali Malik said the budget was pro-poor and pro-business. The leader of the Association of Seed Manufacturers and Importers, Shahzad Malik, welcomed the removal of the 17% sales tax on seeds. Former chairman of the Pakistan Poultry Association, Abdul Basit, demanded a similar withdrawal for poultry feed ingredients and vaccines used by the poultry sector.


The author is a senior reporter at International news


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