LAHORE: While appreciating some of the pro-business measures in federal budget, the Lahore Chamber of Commerce and Industry (LCCI) on Wednesday showed concerns to some of the taxation measures that are bound to jack up cost of doing business besides decelerating economic activity.
In his address following the budget announcement, LCCI President Kashif Anwar gave mixed reaction, noting that while there are positive aspects, but there are significant challenges as well.
On this occasion, Senior Vice President Zafar Mahmood Chaudhry, Vice President Adnan Khalid Butt, former presidents Muhammad Ali Mian, Shahid Hassan Sheikh, Abdul Basit, former vice presidents Faheem Rehman Sehgal, Mian Abuzar Shad, Tahir Manzoor Chaudhry, Zeeshan Khalil, Executive Committee member Raja Hassan Akhtar, and former Executive Committee members Khadim Hussain and Haroon Haroon were also present.
President Kashif Anwar remarked that “apparently this is a difficult budget, which will be little beneficial for the economy.” He emphasised the need for consultation with the stakeholders, stating that “this budget will not provide the necessary support for the manufacturing and exports or the economy.” He pointed out that imposing federal excise duty (FED) on cement and property and removing import duty on glass and imposing FED on immovable property will hinder business operations. He stressed the importance of eliminating non-documented sectors alongside increasing documentation and questioned how construction would increase when capital gain tax has been imposed on real estate and property.
He further highlighted that raising the advance tax to 2.25 percent will increase cost for manufacturers and retailers. He warned that increasing tax rates in this manner invites tax evasion. He showed concerns about the budget and argued that excessive tax rates will negate potential benefits. He said that in those challenging times, increasing the sales tax rate from 12 percent to 18 percent for Tier 1 retailers will hinder documentation efforts. He urged for a simplified tax system, stating that no trader is afraid of paying taxes but is wary of excessive regulatory powers.
Addressing the increase in duties on electric cars, mobile and scrap, Kashif Anwar pointed out that imposing Additional Customs Duty on products not manufactured locally will raise the cost of doing business. He also emphasised the need to curb smuggling, and questioned the rationale behind increasing costs from 32,000 to 36,000 amidst declining inflation and an expanded Benazir Income Support Programme.
Kashif Anwar acknowledged positive steps for the solar sector but cautioned against implementing certain measures. He mentioned that many documents and SROs are yet to come and expressed concern that the current budget will exacerbate inflation and create hurdles for industrialisation and economic activity. He urged the government to consider proposals, take actions based on post-budget demands, and review their proposals to draft the finance bill with proper consultation.
He called for the government to reconsider the budget proposals and make necessary adjustments to foster economic growth and ease business operations.
Copyright Business Recorder, 2024
Comments
Comments are closed.