KARACHI: Although the federal budget 2022-23 is a balanced budget, but it will neither gain investors’ confidence nor help the government to avoid a mini-budget in coming financial year.
This reaction on the federal budget 2022-23 was expressed by business community and tax experts. Zubair Motiwala, Chairman Businessman Group (BMG), at a press conference at Karachi Chamber of Commerce and Industry (KCCI) after budget speech said that the government had presented a balanced budget, which he termed as ‘Ukraine war budget’. He said that the government would have to take more budgetary measures if the Ukraine war was not ended in a month or two.
He said that BMG had supported the charter of economy at all chambers’ meeting with PM, and added that the month of June was very important because four major events would be happened this month – FATF, IMF, friends of Pakistan meetings and announcement of monetary policy.
He said the government in this budget would withdraw the subsidies and make tax changes to increase revenue collection; adding that levy on around 350 items would be reduced while 50 other high-valued items would attract heavy taxes.
He said that electric vehicles were the future but the government had proposed to collect 2% of the value in cases of high value hybrid and electric vehicles, which he suggested to be rationalized.
Moreover, he welcomed the imposition of super tax on banking sector, saying that they had earned windfall gains due to higher interest rates and risk-free investment in government securities. Therefore, the decision to increase tax rate on banking companies to 45% from the current 39% inclusive of super tax is justified, he added.
Zubair expressed his reservation over the mechanism of the Alternate Dispute Resolution (ADRC), saying that the implementation of the proposed fundamental changes in the ADRC mechanism through which a taxpayer whose tax liability is Rs.100 million or more, can benefit from the proposed mechanism.
He said that the measures proposed for agriculture sector were laudable but the government should induct professionals for its implementation; adding that the allocations for health, education and IT sector must be increased.
He said that the proposal to tax transactions of immovable properties on market values would open the doors for more corruption. Haroon Farooqi, former president KCCI said that although this budget was not drafted by the bureaucracy, it would help sending a message to the IMF.
Meanwhile, Rehan Jafri President, Karachi Tax Bar Association (KTBA) said that this budget would neither gain investors’ confidence nor help the government to avoid mini budget in coming financial year.
He said the proposal to convert minimum tax into adjustable tax was a good initiative; adding that the decision to increase tax rate on banking companies to 45% from the current 39% inclusive of super tax would discourage documentation.
Copyright Business Recorder, 2022
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