Karachi, June 17, 2023: The President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Irfan Iqbal Sheikh, has called upon the government to promptly address the anomalies present in the recently announced Budget 2023-24.
After conducting a comprehensive analysis of the federal budget for the upcoming fiscal year, FPCCI has identified several anomalies that could prove counterproductive if not rectified before the final version of the Finance Bill is passed by the parliament, Sheikh stated.
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One of the significant anomalies pertains to customs. Sheikh highlighted the issues related to Delay Detention Certificates on imported goods, which are causing major problems for the business community. The FPCCI demands that shipping lines and agents disregard the Customs Delay Detention Certificate, as it is the main reason for legal deficiencies in the relevant regulations.
Another concern lies with the reduction of customs duty on Butyl Acetate and Di-Butyl Orthophthalates in the 5th Schedule, which could potentially impact the domestic industry. The business community believes that the interests of the local industry should be taken into consideration.
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FPCCI also expressed concerns regarding regulatory duties on paper and paperboard, particularly with regards to HS.4802. The business community suggests the immediate termination of this regulatory duty. Similarly, reservations have been raised concerning HS. 4810, which involves withholding tax on raw materials and should be revised.
The government has made adjustments to customs duty on certain items related to chapters 47 and 48 of the Pakistan Customs Tariff in the current budget. There is a need to revise the tax rates on these items.
Sheikh further highlighted anomalies in income tax. Fleet Operators and Warehousing Logistic Association have identified issues in the revised tax rates mentioned in Section 153 of the Income Tax Ordinance and have requested further revision in favor of the industry.
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The FPCCI urges the government not to burden registered taxpayers further and instead focus on bringing new taxpayers into the tax net to distribute the tax burden equally.
Sheikh emphasized the need to revise the existing slab of the Super Tax, which imposes an undue burden on the business community. The increase in withholding tax (WHT) on companies, service sectors, commercial importers, and persons with bonus shares has further burdened the business, industry, and trade community.
The FPCCI has also received suggestions from women chambers regarding training, skills development, and tax adjustments in relevant sectors as part of proposed taxation reforms.
Anomalies in the erstwhile FATA/PATA regions have also been highlighted, with concerns about unfair concessions and their misuse. The business community argues that the misuse of these privileges has led to increased smuggling, negatively impacting other regions’ industry and trade.
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Sheikh called for the closure of the tax gap between commercial importers and manufacturers under Section 148 of the Income Tax Ordinance to ensure fair competition at all levels.
Additionally, the FPCCI demanded the withdrawal of Section 99-D of the income tax to discourage the discouragement of the business community from legitimately making profits or gains.
The SME sector plays a crucial role in a country’s economy, and the FPCCI emphasized the need for incentives, such as rebates, energy benefits, and minimum taxes, to support the development of small and medium-sized enterprises.
In terms of sales tax, several anomalies have been identified, particularly regarding the description of retail packing. The ambiguity in the 3rd Schedule of the Sales Tax Act, 1990, has raised concerns, especially regarding the classification of 5 kg retail packing as bulk packing for commodities like tea. The government is urged to work with stakeholders to address this issue permanently, as it could impact government revenue.
