Business community showed mixed response to the federal budget 2007-08, appreciating zero-rated raw material imports, reduction in duty on import of alternative energy resources, condemned increase from 15 to 20 percent in sales tax on some raw materials and chemicals.
The businessmen hailed the proposed raise in government employees salaries by 15 percent and 15-20 percent increase in pension, provision of 25 percent subsidy on electricity tariff for tube-wells and Rs 70 per bag of DAP. Commenting on the budget, President Lahore Chamber of Commerce and Industry (LCCI) Shahid Hassan Sheikh also appreciated upgradation of government employees'' pay scale and housing projects. He welcomed four percent of the GDP allocation for education sector but apprehended that levy of 1 percent duty on input would cause increase in prices. As far as the taxation is concerned, he maintained that it was ambiguous so far, he added.
Former senior vice president Sohail Ahmad Lashari said that government was constrained to allocate funds for Jhelum-Neelum hydel project failing which Pakistan would have lost its right on the river and it would have gone to India. The abolition of duty on solar-energy batteries was the demand of LCCI whereas the corporate tax and withholding tax should have been reduced from 35 percent and 2 percent respectively. The government had agreed that it would continue to reduce corporate tax by five percent every year.
Sheikh Muhammad Arshad said that exports target could not be achieved while trade deficit is increasing rapidly. There was nothing in the budget for the one million spindles already closed down in the country. He pointed out that except rice, none of traditional items achieved export target in the year 2006-07. He condemned the meagre allocation of only Rs 2 billion for livestock sector and said the government did nothing except setting up two companies which would only spend Rs 1.5 billion.
He further said that the government could not utilise the funds allocated for the Public Sector Development Programme (PSDP). The budget proposal so far revealed failed to highlight the balance sheet and sources of income.
Chairman LCCI Standing Committee on Customs and Tariff, Irfan Qaisar Sheikh appreciated the budget speech and termed it an industry friendly budget. He said the zero rate import of raw material would help boost the local industry while the relief in duty on alternative energy resources would help minimise the negative effects of electricity shortage.
Chairman Anjuman-e-Tajran, Haji Maqsood Ahmad Butt said that the budget has nothing to facilitate the traders'' community and pointed out that rates of grams (Dal) were wrongly quoted in the budget speech. Moreover, the rates quoted in the budget speech would not deliver to the consumers but forcing people to stand in long queues outside the utility stores. He demanded of the government to authorise the Nazim of union council to monitor the utility store function.
Chairman Pakistan Industrial and Traders Front (PIAF) Mian Abuzar Shad expressed his concern over the allocation for strengthening law and order situation and early adjudication of litigations in the civil courts.
Former senior vice president Mian Muhammad Ali said the budget is not encouraging for the industry and regretted that the government could only spend one tenth of the allocation made for the Bhasha Dam during last budget.
Senior Executive Committee Member Mian Usman, Ghulam Sarwar Malik and Abdul Basit also expressed their views about the budget while vice president Mubashar Sheikh was also present on the occasion.
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