ICCI terms budget balanced one in current difficult situation

ISLAMABAD/LAHORE: Muhammad Ahmed Waheed, President Islamabad Chamber of Commerce and Industry (ICCI) has said that the government has presented a balanced budget in the current difficult situation and hoped that this budget would help in promoting business activities. He said that the government has reduced the customs duty on 40 raw materials of various industries and reduced the customs duty on 90 tariff lines from 11% to 3% or zero% which is very encouraging. The government has also reduced regulatory duties on a number of industrial inputs that would hopefully reduce the production cost. He said this while giving his initial reaction on the Federal Budget 2020-21.

Muhammad Ahmed Waheed said that the government has increased the minimum threshold of supplies by retailers for obtaining CNIC of the buyers from Rs.50,000 to Rs.100,000 which is a positive move. He said that the government has also reduced the federal excise duty on cement from Rs.2 per kg to Rs.1.75 per kg which will reduce the price of cement and boost construction activities. He said that the government has proposed some amendments to simplify the withholding tax system which will hopefully benefit the business community. He said that the most welcome step was that despite the difficult financial situation, the government has not imposed any new tax in the budget.

The ICCI president said that Pakistan was in dire need of boosting exports at the moment to revive the troubled economy and therefore demanded that the government should announce better incentives for exports and information technology sectors in order to increase our exports and boost investment. He said that in view of the current difficult situation, the government has presented a better budget and hoped that the government would include further suggestions of the business community to create a more conducive business environment in the country.

Tahir Abbasi, Senior Vice President of Islamabad Chamber of Commerce and Industry, Mian Shaukat Masood, Naeem Siddiqui, Mian Arif, Muhammad Ilyas, Muhammad Aslam Khokhar, Umar Farooq, Khalid Chaudhry and others were also present on the occasion.

The Lahore Chamber of Commerce & Industry (LCCI) gave a mixed reaction to the federal budget 2020-21 and called for extraordinary steps to overcome the challenges in post-COVID situation.

Addressing a press conference after the budget speech, LCCI President Irfan Iqbal Sheikh, flanked by Senior Vice President Ali Hussam Asghar and Vice-President Mian Zahid Jawaid Ahmad, said the government did well by presenting a tax-free budget but some measures, demanded by the LCCI had been ignored.

The former LCCI office-bearers and executive committee members were also present. The LCCI president welcomed allocation of funds for power and water projects, and the agriculture sector.

He said that exemption of additional custom duties on those tariff lines which were now at zero per cent customs duty in tariff, reduction of customs duty on 40 raw materials of various industries reduction in regulatory duty from 12.5 per cent and 17.5 per cent to six per cent and 11 per cent, respectively, were good measures.

Irfan Iqbal Sheikh also welcomed the reduction in regulatory duty on smuggling-prone items and cut in regulatory duty on several industrial inputs to decrease their cost of doing business and enhancing the scope of concessions available to Special Economic Zones.

The LCCI president, however, said the Lahore chamber was demanding a cut in mark-up rate. It should be four to five per cent to bring down the input cost of the industrial sector, he added.

He said no special package had been announced in the budget to boost exports and to remove the hurdles which were hampering the growth of export sector.

No policy has been announced to reduce the energy cost, he said, adding the demand of interest-free loans to SMEs, further improvement in refunds system, removal or cut in withholding tax, end to advance tax at import stage and help in certification for SMEs remained unaccepted in the budget.-

Business community of Rawalpindi has termed fiscal budget 2020-21 below expectations; however, they welcomed decision of no new taxes.

President, Rawalpindi Chamber of Commerce and Industry (RCCI) Saboor Malik while commenting over budget 2020-21 said that the budget falls below expectations for the business community. However, they appreciated that no new tax has been imposed.

He said the revenue target in the budget has been set at Rs4963 billion. It is impractical and does not reflect the ground realities. “We demand that the government must review its revenue targets.” He said.

“The condition of CNIC, which was earlier 50,000, is now proposed to be extended to 100,000. This was our long standing demand and also agenda point of RCCI 12th All Pakistan Chambers Presidents Conference 2020,” he said.

He said that the chamber had proposed to reduce the sales tax from 17 to 5 percent. “We were disappointed that it was not accepted. It is proposed to enable alternative dispute resolution, ADRC. This was a long standing demand of the Chamber which has been met. At the same time, Rs650 billion has been earmarked for PSDP, which is less. It should be increased. Last year, Rs 675 billion was allocated,” he said.

The RCCI president said the Chamber had proposed to abolish the tax for POS point of sales, but the rate has been reduced from 14 percent to 12 percent.

The scheme announced for the construction sector, which was due to expire in December 2020, was demanded by the Chamber to be extended. It has been extended to June 2021. This is welcome decision. The demand to update and fully digitise the FBR system was also met.

The rate of advance tax on raw materials has been reduced to 2 percent. The Chamber had demanded at the 12th All Pakistan Chamber Presidents Conference that the rate should be reduced from 5.5 percent to 3 percent. “Tax refunds have been issued to address the shortage of capital. This is also a good move,” he added.