KARACHI: Business community and tax experts on Friday gave mixed reactions on the federal budget 2021-22. Majority of them see the federal budget 2021-22 as growth-oriented and may drive the stagnated economy while others believe that the proposals to withdraw exemptions from Sixth Schedule and to bring Eighth Schedule items into standard tax regime will increase the prices of basic food items and hit the common man.
Adnan Mufti, a tax expert said the proposal to withdraw exemptions from Sixth Schedule would increase the prices of imported food items and will cause an escalation of smuggling in the country.
Moreover, he said the items falling in the Eighth Schedule were proposed to be treated under standard tax regime and added that this proposed amendment would increase the sales tax rate from 10 percent to 17 percent on branded and non-branded food items including milk, yogurt, butter, ghee, water, etc and would hit the common man.
He said the proposal to treat online marketplace as supplier in respect of third party sales through their platform under the Sales Tax Act 1990 would discourage the e-commerce industry in the country.
Mufti said the proposal to withdraw zero-rating from petroleum crude oil, parts/components of zero-rated plant and machinery, import of plant and machinery by the petroleum and gas sector and supply, repair and maintenance of ships was not revenue generating measure.
Instead of eliminating the role of the middleman, the government in this federal budget 2021-22 proposed to levy sales tax on sugar on retail price, which is not a public friendly proposal, he said.
Meanwhile, All Pakistan Customs Agents Association (APCAA) chairman Arshad Jamal appreciated the government for accepting their proposal and fixing the responsibility of re-exporting the consignments of banned items on the shipping companies.
Furthermore, he said the government had not recommended any measure for trade facilitation in the budget but proposed to impose more restrictions in the rules, which would create difficulties for the trade.
"The government should issue instructions and allow the transfer of the consignments, which were stuck at ports due to litigation, to the bonded warehouses to facilitate the trade at maximum," he added.
FPCCI vice president Arif Jeewa appreciated the government for continuing the incentives offered to the construction sector, saying that Additional Regulatory Duty (ARD) and Regulatory Duty (RD) on steel bars should have been withdrawn to keep the construction cost at affordable range especially for low cost housing.
ABAD patron-in-chief Mohsin Sheikhani said although the budget seemed friendly, the government should have taken measures to keep the prices of construction material constant in order to make low cost housing practically viable and added that the utilization of the allocation of around Rs. 900 billion as development budget should be ensured.
PAAPAM ex-chairman and the auto sector expert Mashood Ali Khan said the tax incentives proposed for small cars up to the engine capacity of 850cc would reduce the prices by 5 to 6 percent.
PAAPAM chairman Abdur Rehman said the tax incentives proposed in this budget for small cars up to the engine capacity of 850cc would encourage growth in small cars and termed it as an industry friendly budget.
Copyright Business Recorder, 2021
Comments
Comments are closed.