ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Friday said that there exists complete confusion as to what exactly was condition/demand of the International Monetary Fund (IMF) for which the Federal Board of Revenue (FBR) negotiated the levy of taxation of Rs343 billion for all the sectors of economy including agriculture, industry and services.
In a communication to the FBR here on Friday, Nasser Hyatt Magoo, president FPCCI called the present ongoing process of managing the way through for the approval of the ‘mini-budget’ as most unfortunate situation without consultations with the business community and other stakeholders.
He said that the budget or mini-budgets without consultation with the business community is deplorable act, wherein it is said that FBR has successfully negotiated the IMF request to raise revenue by Rs700 billion to Rs343 billion.
He said that we are shocked if the negotiation of well-being of people of Pakistan is administered and decided by FBR without any in between prior consultations with the businessmen, stakeholders and the upper and lower house representatives.
The so-called successful negotiation by FBR on behalf of people of Pakistan is also not presented with the impact analysis as which sector will get adverse impacts of inflation, ease of doing business and investments made or to be made.
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He further said that above to all the impact of inflationary taxation on common man remains only politically debated as for and against without any comprehensive analysis thereof.
On the other side, if the finance minister says that the net burden of inflation on common man is not more than Rs2.0 billion then what about 341 billion taxes which are being imposed on production economy for consumptions and for consumers.
The rising of indirect taxation in simple economics is tool of generating inflation. Without making any such sound impact analysis, the economic activities may come under more difficult situation compounded with already carried forward effects of Covid and now newly reported spreading omicron virus.
The FPCCI president said that a knowledge-based fully salable minibudget with complete impact analysis to satisfy the demand of economics affect conclusion remains absent as of today.
He said we would like to know as what exactly the tax expenditure amounts are being imposed on the different sectors encompassing claimed to be 150 items to be affected by imposition of standard sales tax.
The FPCCI president said that there exists complete confusion for us as what exactly was conditioned demand of IMF for which FBR negotiated the levy of taxation of Rs343 billion for all the sectors of economy namely agriculture, industry and services to be inclusive to.
The president FPCCI further said that it appears that 343billion taxation is meant for reducing the budget deficit for servicing the markups and the principal amounts due.
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However, he said that this amount may erode and compress its value number when the rupee keeps falling.
It is said that for every one-rupee devaluation, the additional demand of Rs100 billion is generated for servicing the markups and returning the loans as are due or would be due.
This economics remains totally out of any policy frame work as whether the rupee value would be also kept managed to keep the purpose of collecting extra taxes of Rs343 billion towards domestic and international obligations.
He said that he also wonders when he is taking reports from the newspapers that Rs251 billion will be refunded/adjusted and therefore only Rs91 billion will be passed-on to consumers.
However, if it is so it negates the assurance of Finance Minister that only Rs2.0 billion constitute extra incoming inflationary pressure for common man.
Copyright Business Recorder, 2021
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