Karachi, June 9, 2023 – Irfan Iqbal Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), representing the entire business community, expressed concern over the federal budget 2023-24, stating that it presents an unrealistic picture of the economy. The business community is particularly interested in uncovering any hidden taxes within the budget.
Sheikh highlighted that the revenue target of PKR 9,200 billion appears challenging and could have severe negative consequences. Last year’s revenue target of PKR 7,500 billion has not been achieved, and this year’s economic growth rate has drastically dropped to only 0.29%. Imposing higher taxes on such minimal economic growth seems counterproductive.
He further emphasized that the government is imposing new taxes and increasing the tax volume without expanding the tax net or including new taxpayers. This implies that the burden will primarily fall on those already within the existing tax net. Sheikh emphasized that stabilizing interest rates, exchange rates, and petroleum prices are crucial for the economy to perform effectively.
While Sheikh appreciated certain aspects of the budget, such as increased loans for poverty alleviation and initiatives for youth empowerment, he noted that the allocation of PKR 5 billion for women empowerment is insufficient considering the population’s proportion of women.
Regarding the development budget, Sheikh emphasized the need for careful consideration of merit and priorities in its allocation. He expressed concern that during times of increasing government deficits, the development budget is often reduced and faces obstacles in allocation.
Sheikh highlighted the need to enhance services exports, as the volume of Pakistan’s service sector exports remains insignificant. He welcomed the allocation of PKR 491.3 billion for infrastructure, a sector that FPCCI emphasized in its budget proposals.
Sheikh also praised the increase in support for Real Estate Investment Trusts (REITs), which will facilitate the completion of pending projects in the sector. He acknowledged the allocation of PKR 1,804 billion for defense, considering the prevailing security challenges and terrorism threats.
The extension of the warehousing period for perishable items from one month to three months was seen as a facilitation for trade. Measures such as rephrasing the definition of smuggling were also appreciated for their potential to prevent illicit activities. However, concerns were raised regarding the one-year extension of sales tax exemption on erstwhile FATA/PATA, as there were demands for its abolition.
In conclusion, the FPCCI expressed its concerns and hopes for revisions and improvements in the budget to better address the needs of the business community and support the overall growth of the economy.