Daily Times

FPCCI acting president Shabbir Hassan Mansha has remarked that the federal budget for 2022-23 is inconsistent and lacks clear justifications for many budgetary and fiscal objectives. In contrast, the business community anticipated an industrial package that would catapult the nation into an industrialization and import substitution model. He noted that the business community is concerned about the application of wealth tax on tax-paid assets.

Acting FPCCI Chief welcomed the emphasis on setting up special economic zones (SEZs) under CPEC and also commended the imposition of fixed tax on small retailers as it will make it viable for them to register into the taxation system.

Shabbir Hassan Mansha expressed his dismay that FPCCI, being the apex body, had proposed to the government to announce a comprehensive industrial package; as there is no other way to control the unsustainable trade deficit contributing to the current account deficit that will be $47-48b this year; gradually reduce debt servicing of Rs3.95 trillion; protect the ever-depreciating rupee resulting in massive fuel and power inflation; dwindling foreign exchange reserves; growth rate which is grossly insufficient to match the population explosion; increasing unemployment and curtail the budgetary deficit through generating more taxes through productive activities – not through squeezing the existing taxpayers even further.

Addressing the other area of concern, Mr Shabbir Hassan Mansha said that remittances have recorded a significant decline of 25pc in May 2022 on a Month-on-Month (MoM) basis; and, FPCCI had categorically proposed to incentivize and facilitate the remittances. FPCCI recommends opening selected commercial bank branches 24/7 in all major cities and towns of Pakistan to facilitate remittances – taking care of time-lapse in emergency circumstances and varied time zones.

Shabbir Hassan Mansha noted with a sigh of relief that zero tax has been levied on agricultural machinery and inputs, which was a major demand of FPCCI; given the food security situation of the country. Exempting tractors and seeds was critically needed and the government listened to us on the issue, he added. However, fertilizers should also have been exempted as well as it is one of the major inputs for higher yields.

Shabbir Hassan Mansha appreciated the relief to the middle class for making taxable salaried income threshold Rs100,000 per month from the current Rs50,000; and, also providing relief to micro and small businesses by raising the minimum tax bracket from 0.4m to 0.6m.

Shabbir Hassan Mansha maintained that property tax of 1pc on properties worth over 25m should be reconsidered; as in the times of crises, all segments and sectors of the economy should be supported. It is pertinent to note that real estate and construction sectors directly or indirectly accelerate growth in 40 industries, he added.

Acting FPCCI Chief expressed his satisfaction over the logical and much-needed decision to exempt solar panels from sales tax and also on their distribution. He added that it will facilitate the migration to solar power for households and SMEs.

Shabbir Hassan Mansha said that budget allocations for education and health are insufficient as inflation has eroded the purchasing power parity (PPP) of the Pak rupee; low-income segments have been crushed to the extent that they cannot bear these expenses themselves and public health infrastructure is in an abysmal state. He has called for at least 40 – 50b allocations for developing and maintaining public sector healthcare infrastructure; instead of the earmarked Rs24b.

Acting FPCCI Chief noted that a 15pc raise in salaries of the government employees is though not enough, but will surely provide some breathing space to them. He also maintained that it remains to be seen whether the promise of zero load-shedding to industries is fulfilled or not as there no plan of action has been shared with the business community.