The business community while expressing reservations over, what they said, hidden details of budget 2009-10, termed it as jugglery of figures and said it would further constrict the existing taxpayers rather than brining new taxpayers in tax net for which government had been persistently showing its resolve.
Lahore Chamber of Commerce and Industry (LCCI) President Mian Muzaffar Ali, in his immediate reaction soon after the budget speech, said the budget was very glorified to the extent of speech, which may please the people, otherwise it contains a number of anti-business steps in the tax system.
The power under Section 115 of the Income Tax Act would practically put an end to Self-Assessment Scheme, he said and added the possibility of increase in withholding tax beyond four percent on the importers, exporters, and service providers would open the doors of corruption in the tax department.
The State Minister for Finance Hina Rabbani Khar, in her budget speech proposed an increase of withholding tax on imports from two percent to four percent as minimum, meaning thereby it could be enhanced by the tax officials. If the tax officials were given authority to increase withholding tax even above four percent, the discretionary powers would promote corruption in the tax department, he said.
Mian Muzaffar said the introduction of two shifts day and night in judicial system is another good step and would help provide speedy justice. The government has at least acknowledged the industrial sector problems that was put forwarded by the Lahore Chamber, he said. Talking about the construction of dams for water storage and electricity production, he said the government did not give any timeframe with regard to their completion. He said that increase in Public Sector Development Programme would definitely have trickle down effect and would create more job opportunities while increasing withholding tax would encourage smuggling.
It would have been better if no increase was made in withholding tax on imports. Same way, the creation of Rs 40 billion Export Investment Support Fund would help strengthen the industrial sector while the powers of tax officer under Section 115 would practically put an end to Self Assessment Scheme.
Senior Vice President LCCI Tahir Javed Malik appreciated the decrease of five percent duty on the import of CKD and said the relief needs to be passed on to the consumers and the manufacturers should at least reduce the vehicles' prices by five percent. He, however, showed his concern over the proposal of tractor import on zero rate.
Pakistan Industrial and Traders Association Front (PIAF) Chairman Irfan Qaiser Shaikh appreciated the government decision to pay profit on the refund claims if delayed more than 90 days. He, however, criticised the budget speech for lacking measures to solve the industries' problems and steps to revive the industry. The budget speech was ambiguous and uncertain with regard to most of the issues relating to the taxation and duties, he added.
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