Covid-19 pandemic: Federal budget does not focus on changing economic priorities: FPCCI

KARACHI: Convener Budget Advisory Council, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Zakaria Usman on Monday termed the proposed federal Budget for the financial year 2020-21 (FY20-21) 'traditional budget' which has no focus on the changing economic priorities, in the face of Coronavirus (Covid-19).

Giving the apex trade body's post budget stance at a press conference here at the Federation House, he said the government has claimed that it has come up with no new tax in this budget, however, its revenue collection targets seem unrealistic, given the fact that businesses are under extreme pressure, amid fast spreading Coronavirus, and lockdowns.

FPCCI President Mian Anjum Nisar was actually holding the presser through video link from Lahore. However, due to some technical and other reasons; his speech could not properly be listened here in Karachi.

Zakaria Usman said how a government could be able to generate this amount of taxes of Rs 4.93 trillion in the absence of a robust economic activity. The reopening of certain sectors of economy will not lead to creating an environment in which the government will be able to meet its tax collation targets.

He said preparing a balance budget in the midst of Coronavirus epidemic which has already inflicted Rs 3 trillion losses on country's GDP or economy was no joke.

Expressing concerns over the budget, he said the demand for restoring the zero-rating facility, and proposals of the textile export sector have been widely disregarded. No support/policy for SMEs which is the most vulnerable sector under the current crisis. He said the CNIC issue has not been resolved, sales tax, corporate tax, and turnover tax rate have been not reduced, and further sales tax has not been eliminated.

He said although duty on smuggling prone items has been reduced but no measure has been proposed for physical enforcement to check smuggling. No measure has been announced to control Pak-Afghan Transit Trade which continues at mass scale as evident from the fact that raids are being made on big go downs.

The FBR should apprise the concerned manufactures that why the duties on their raw material are not reduced. DTRE Scheme has not been simplified. No clear cut policy on demurrage has been announced. He said the time period of records keeping of 6-years - section 174 has not been reduced.

Usman acknowledged that the government has incorporated a number of recommendations of the FPCCI including exemption of additional custom duties on those tariff lines which are now 0 percent customs duty in tariff, reduction of custom duty on 40 raw materials of various industries, tariff rationalization under national tariff policy 2019 by reducing customs duty on 90 tariff lines from 11 percent to 3 percent and 0 percent, reduction in regulatory duty from 12.5 percent and 17.5 to 6 percent and 11 percent respectively on Hot Rolled Coils (HRC) of Iron and steel falling under PCT codes 7208, 7225& and 7226, respectively.

He said a number of industrial inputs-intermediary raw materials are being allowed concessional import under new serial number of the fifth schedule through IOCO quota determination such as Butyl Acetate, syringes and saline infusion sets, buttons, interlining/buckram and wire rod etc.

He said the apex trade body has constituted the budget anomaly committee, which has been working to identify issues, and get them resolved through consultation with the government before the budget gets approved.