Tax experts term budget satisfactory

Tax experts have termed the Federal Budget for fiscal year 2008-09 as satisfactory and based on the state of the country's economy. Talking to Business Recorder on Wednesday after the budget speech, the Income Tax Bar Association (ITBA) Karachi, President, Abdul Qadir Memon termed the budget as balanced.
He said that the government's announcement to increase the share of direct taxes will help arrest the soaring inflation in the country. "The announcement of general amnesty for non-payers of past liabilities will help widen tax base and volume in future," Memon added.
The ITBA General Secretary, Zubair Ahmed said the government's step to fix the levy rate on import of raw materials to two percent will end the dispute of commercial and industrial use. He was of the view that the budget is realistic, however, it will not decrease hardships and miseries being faced by a common man. Former President Income Tax Bar Association (ITBA) Karachi Ali A Rahim termed the budget as realistic and proactive saying that the financial experts of the government have done their job well as the budget was according to present circumstances and economic turmoil in the country. "It was expected that the budget would be a tough one due to poor economic situation," Rahim added.
He said that new avenues of taxation have been explored in the budget by taxing non-resident media by 10 percent, investment tax on income by two percent and non-resident reinsurance by one percent. He added the step would help the government achieve its tax target.
Rahim also praised the decision to levy covered area by Rs 150 per sq yard and plot by Rs 100 per sq yard, saying that these taxes would bring the builders and developers into the tax net. However, he was surprised that still certain sectors were not levied which were expected to be taxed in the budget. Manager KPMG Taseer Hadi and Co and a tax expert Mohammad Ashraf termed the budget healthy saying that the government has tried to remain within its resources. "Government has provided measures for common man in the budget, but it needs to be supplemented with reducing non-development expenditure," he added.
He said that the exemption level to the salaried individuals and introduction of marginal tax relief would help them cope with the increasing inflation level. Ashraf praised the decision to increase duty on luxurious items but was of the view that some items like refrigerators and microwaves have become essential with the passage of time, so these items should not be categorised as luxurious. Regarding one percent increase in Sales Tax, Ashraf maintained that the rate has been increased on the premise of revenue needs and feared that it might impact the inflation level in the country.