KARACHI: The trade and industry described the next year’s budget as ‘balanced’, but expressed concerns over the Federal Board of Revenue’s collection target which has been increased by Rs500 billion to Rs4.01 trillion.

Talking to the media after the budget speech on Friday, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zubair Tufail said the next year’s budget was balanced. He was flanked by business leaders S.M. Muneer, Fawad Ejaz and Shakil Dinghra.

They expressed concern over the larger size of the next revenue budget and questioned that when no new taxes were imposed then how the government would collect Rs500bn more in fiscal year 2017-18.

Though Finance Minister Ishaq Dar in his budget speech hinted that the Rs500bn was going to be collected from economic growth, business leaders were generally sceptical.

However, these leader made it clear that it was too early to grasp the true picture of the budget, and that they needed time to go through the documents.

They appreciated cut in sales tax rates from 17 per cent to 7pc on many sectors, including the import of textile machinery.

In the next year’s budget, the federal excise duty on cement will be increased from Rs1 per kilogram to Rs1.25. Mr Tufail suggested that the duty should not be increased as the cement sector was growing at a fast pace.

These leaders welcomed the proposal to bring builders and developers under the normal tax regime because the commitment given by their association of ensuring Rs22bn in revenue collection during the outgoing fiscal year failed miserably as only Rs10.1 million was collected.

The appreciated the increase in customs duty on the import of walnuts because “cheaper imports of such items are hazardous for health and have damaging consequences for the youth”.

The industry stakeholders welcomed the proposal to bring builders and developers under the normal tax regime

The industry welcomed Mr Dar’s suggestion that all political parties should enter into a “charter of economy” so that the process of progress and economic stabilisation continues no matter who comes to power.

Fawad Ijaz of Pakistan Readymade Garments Association said that the demand for the removal of customs duty on the import of all categories of hides and skins has not been met.

He said that only raw hide has been declared zero-rated while pickle and wet blue hides, which are consumed by the value-added leather sector, were not mentioned.

However, business leaders doubted the commitment made once again by the finance minister that all the outstanding refunds of the export trade would be paid back.

The finance minister assured that all those refunds against which release payment orders were made in April and having an amount of Rs1m will be cleared by July 2017. The remaining refunds will be cleared by August 14.

This is not for the first time such assurances have been given to exporters, thee industry leaders said, adding that during last two years such commitments came from the government but were never fulfilled.

They said the issue of cost of doing business has not been attended because the budget proposals carried no such measures which could help the manufacturing sector cut costs, and therefore any increase in exports was impossible.

The move to increase minimum wage by Rs1,000 to Rs15,000 a month was well taken by the industry leaders.

Rice Exporters Association of Pakistan (REAP) chairman Mahmood Moulvi appreciated the government’s move to allow rice exporters to set up warehouses in some major global markets.

He said REAP members have already planned to set up warehouses in Kenya, United Kingdom, West Africa, Iraq and some new markets. This would help Pakistan fetch better price for the commodity, he said.

Meanwhile, the leaders noted that the Rs180bn relief package announced by Prime Minister Nawaz Sharif was not being implemented because so far only Rs1bn has been disbursed to the textile sector and Rs400m to the non-textile sector.

Published in Dawn, May 27th, 2017