BUDGET TERMED BUSINESS & INDUSTRY FRIENDLY

KANWAL SALEEM
(feedback@pgeconomist.com)

June 4 - 10, 20
12

Trade and industry people have welcomed budget 2012-13 and said the government has presented a balanced budget in difficult economic situation. The Lahore Chamber of Commerce and Industry (LCCI) President Irfan Qaiser Sheikh, flanked by Senior Vice President Kashif Younis Meher and Vice President Saeeda Nazar termed the Federal Budget 2012-13 business and industry friendly.

They said the finance minister Dr Hafeez Sheikh deserves appreciation for accepting a number of LCCI demands including cut in turnover tax, allocation of Rs10 billion for export development fund (EDF), raise in tax exemption ceiling from Rs350,000 to Rs400,000, increase in limit of cash withdrawal, cut in withholding tax on commercial importers, and cut in tax on exports.

The LCCI former presidents Mian Anjum Nisar, Shahid Hassan Sheikh, Mohammad Ali Mian, Mian Muzaffar Ali, former Senior Vice Presidents Sohail Lashari and Sheikh Mohammad Arshad also gave their point of view. They said that cut in withholding tax on commercial importers and cut in tax on exports would give much needed boost to businesses.

The LCCI President said that for creation of 100,000 new jobs, the government would have to provide an enabling atmosphere to the private sector that is the engine of growth. He said that subsidy on solar tube wells would help strengthen agriculture sector besides promoting the alternate energy sources for electricity generation. He said that abolition of duty on 28 pharmaceutical industry items is a good step. He said that application of same general sales tax rate would also support the dwindling economy.

The LCCI president said that decrease in tax slab from existing 17 to 5 is also a good step for the economy. He said that cut in FED on cement would also support the construction sector, which was in dire need of government's help. He said that the Prime Minister's decision to convert the Prime Minister house in institute for advance studies would promote austerity culture and discourage lavish living in big houses. He, however, said that the business community was expecting an announcement regarding the building of new dams but no such announcement was made.

He said that no policy was announced for the loss-making public sector enterprises that are eating up huge amount annually. He said that no measures were announced to broaden the tax net and it seemed that the existing taxpayers would be targeted to meet the revenue target.

On the other hand, traders alleged that government, contrary to its claims, has miserably failed in providing relief to the common person in the budget.

Advisor to chief minister Punjab on Trade Affairs and PML (N) Traders Wing Lahore President, Babar Mahmood, said that budget is a big failure on part of the government to address the vital issues of price hike and unemployment.

They said that elected governments had always been the focus of hopes of the people for relief but the rulers had over-burdened the masses to meet their administrative and non-productive expenditures. They also said that no incentives were announced in the budget for the small traders who were already badly affected by the economic crunch and the energy crisis.

Information Secretary PML (N) Traders Wing, Mian Shafqat Saeed, asked the government to ensure financial discipline and good governance. He said that there is a need to bring untaxed into tax net by increasing the number of taxpayers.

The Lahore Stock Exchange (LSE) members have described the budget 2012-13 as ambitious but said it would positively affect the capital market.

Former Chairman LSE Asim Zafar said that most of the details regarding the next financial year budget were already available in the market as evident from the cement sector performance in the recent past. The measures already taken to strengthen the capital market include the Capital Gains Tax (CGT) Ordinance under which source of income would remain undisclosed for the stock market investors who hold shares for 120 days and authorization to the National Clearing Company of Pakistan Limited (NCCPL) to compute, determine and collect tax on behalf of taxpayers as CGT which provided relief to the investors, as they have no need to file tax return. Both the steps were part of the budget, he said.

Asim Zafar was of the view that market would remain positive in the coming days. He, however, added that the relief given to the mutual funds in the budget might not help this sector until it improves its performance.

Javed Iqbal of Javed Iqbal Securities said that the finance minister has fulfilled his commitment like introduction of much-demanded CGT Ordinance that would help stability of the market. He, however, criticized the government for allowing import of fertilizer despite the fact the local industry had the capacity and potential to meet the demand.