The business community has termed the federal budget 2008-09 as agriculture incentive-based budget having nothing for the industrial sector. They appreciated increase in salaries of government servants, Benazir Income Support Programme, increase in National Saving interest, and increase in duty of luxury items, but disapproved increase in sales tax, central excise duty and ignoring reduction in duty on industrial raw materials.
Commenting on 2008-09 budget presented by Federal Minister for Finance Naveed Qamar in National Assembly on June 11, President of Karachi Chamber of Commerce and Industry (KCCI), Shamim Ahmed Shamsi, said that overall the budget was better for agriculture sector and hoped that agriculture produce would increase and dependence on imported food items would substantially be reduced in the long run.
He criticised increase in sales tax by one percent, and said that it would increase the cost of doing business and, ultimately, increase the prices of all items produced in the country.
He said that the budget had nothing for industrial sector and it also failed to fulfil business community's expectations. AS former president of KCCI, Zubair Motiwala, said that it was too early to say that the budget "is good or bad". He said that the government claims to increase the tax base but the measures adopted in the budget did not seem to achieve the objective.
Siraj Kassim Teli appreciated Benazir Income Support Program and said that it would help the poor people in a big way.
He said that the scheme should be implemented in a way that it should not be misused. Criticising increase in sales tax by one percent, he pointed out that the business community was demanding that sales tax should be reduced from 15 per cent to 10 percent, whereas it has been increased by one percent. It may have negative impact on industrial production cost, he added.
He said that in the long run, the government has to reduce sales tax. The Chairman of All Pakistan Motor Dealers Association, S.M.Shahzad, said that reduction in CKD duty from 35 percent to 30 percent would increase on money on new cars.
He said that the association had proposed to increase the age of second-hand cars from three years to 7 years, but this demand has been rejected. Had the government approved this demand, it might generate additional revenue of Rs 30 billion, he claimed. KCCI sub committee of Small Traders chairman Abdul Majeed Memon expressed feared that Benazir Income Support Program would not succeed, as Nadra had no record of poor people. It has just record of people with no income details.
Appreciating increase in duty on 300 luxury items said that it is a good step in right direction. Chairman, Alliance of Market Associations, Atiq Meer said that the government has given nothing in the budget. "Whatever we have, has also been taken back by the government," he remarked.
Chairman, Motorcycle Spare Parts Importers and Dealers Association (PSPIDA) Faisal Khalil said that increase in duty from 10 and 15 percent to 30 and 35 percent on t300 items may hit consumers in a big way.
He also criticised increase in sales tax and duty. Nisar Anjum appreciated increase in salary of government officials and pensioners. FPCCI standing committee on construction Chairman, Munir Sultan criticised ignoring construction sector in the budget and said that imposition of Rs 100 per sq yard on plots would further increase cost of plots.
Commenting on government announcement of construction one million low cast houses, he said that the scheme did not indicate who is going to construct the houses and how land would be allotted.