Business community demands revisiting mini-budget

Business community demands revisiting mini-budget

The business community in Pakistan has vehemently rejected the recent approval of the mini-budget by the government and is urging a reevaluation of the Finance Supplementary Bill 2021-22, which was endorsed by the National Assembly just a day earlier.

The leadership of the Businessmen Group and the Karachi Chamber of Commerce and Industry (KCCI) issued a joint statement on Friday expressing concerns over the taxation measures outlined in the bill.

Chairman Businessmen Group, Zubair Motiwala, along with Vice Chairmen Tahir Khaliq, Haroon Farooki, Anjum Nisar, Jawed Bilwani, General Secretary AQ Khalil, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Vice President Qazi Zahid Hussain, and Former Senior Vice President Ibrahim Kasumbi jointly conveyed their reservations. They emphasized that the Supplementary Finance Bill 2021-22, based on International Monetary Fund (IMF) directives, would not only adversely affect industry and trade but would also place an additional burden on the poor and middle-class segments due to an increase in consumer goods prices.

The business leaders demanded a revisiting of the bill, asserting that it should not be implemented without engaging the main stakeholders in the decision-making process. They highlighted specific measures within the bill that they believe would have detrimental effects on both the economy and the lives of the common citizens.

Among their concerns were harsh measures and the withdrawal of exemptions on essential consumer items such as Packaged Dairy Milk, Oil Seeds for sowing, Plant & Machinery, and industrial raw materials, including Raw Cotton. The leaders argued that such measures would severely impact industrial performance and contribute to the financial woes of the less privileged.

In their statement, the business leaders expressed dismay over the imposition of taxes on everyday items like milk, making life more challenging for the average citizen. Additionally, talks of monthly increases in petrol prices, coupled with potential raises in electricity and gas tariffs, led them to believe that the IMF’s influence was steering Pakistan toward an unsustainable economic path.

The leaders urged the government and the Federal Board of Revenue (FBR) to focus on broadening the tax base instead of burdening compliant industries and consumers to meet IMF conditionalities. They suggested that significant additional revenue could be generated by addressing loopholes and curbing abuse, such as smuggling and misuse of exemptions.

Criticism was also directed at amendments to the Sales Tax Act 1990, particularly the holding of suppliers liable for fake Computerized National Identity Card (CNIC) numbers provided by purchasers. The leaders argued that such changes would lead to entities exiting the Sales Tax net and hinder efforts to expand the taxpayer base.

Regarding the Sales Tax on raw materials, especially for the textile industry, the leaders called for the restoration of concessional rates. They emphasized the counterproductivity of increasing taxes on essential inputs, given the recent influx of plant and machinery under the Textile Exports Revolving Fund (TERF).

The business community leaders also protested against the imposition of taxes on Tax-Free Export Processing Zones, terming it a conspiracy to undermine activities in these zones. They called for the withdrawal of the amendment that imposed a 17 percent Sales Tax on Export Processing Zones.

The leaders also highlighted increases in Sales Tax rates on essential items like branded and packaged milk, flavored milk, raw materials for pharmaceuticals, household-type sewing machines, and oil seeds for sowing. They argued that these tax hikes would lead to inflationary impacts, increased drug prices, and negatively impact self-employed individuals.

In conclusion, the business community leaders called for a reevaluation of the Finance Supplementary Bill to ensure a fair and sustainable economic environment. They stressed the need for dialogue with stakeholders and a focus on policies that promote economic growth, job creation, and overall prosperity.