ISLAMABAD: The Pakistan Industrial and Traders Associations Front (PIAF), while commenting on the federal budget 2023-24, has said that it is apparently a mixed budget, as the finance minister has not been fully successful to present a business-friendly budget due to IMF conditions, as the government is caught between a painful fiscal adjustment reforms agenda set by the IMF, and to make room for any relief to the people ahead of the elections.
PIAF Chairman Faheemur Rehman Saigol said that the government has imposed new taxes of almost Rs200 billion without bringing more sectors into tax net, implying burdening those who are already paying taxes.
He noted that there was no mention of reduction in energy tariff, adding that the federal government would fail to reach the targets set in the budget. He said that the country’s exports will likely to be less than $30 billion, adding that the target of Federal Bureau of Revenue (FBR) will not be achieved.
Faheemur Rehman Saigol said that the present budget lacks major objective of giving a long-term direction to economy, as no visible reduction in cost of doing business or cut in taxes in budget has been announced to speed up the growth or create new jobs in the country. He said that Pakistan needed millions of jobs annually but the government had not taken any concrete step in federal budget for job creations for the unemployed youth. Although details are still to come out, the budget vibes seem positive, he said.
The Piaf Chairman stated that the businessmen had demanded of the government to take concrete steps in the upcoming Federal Budget 2023-24 to keep industrial wheel running especially of SMEs, saving the livelihood of millions of workers associated with the small industries. The major focus should have been on greater relief to the documented and registered SMEs. In this budget too, the government attempted to squeeze the neck of old taxpayers instead of taking efforts to bring new taxpayers into tax net. Budget FY24 is an attempt to satisfy IMF on key matters relating to revenue collection, subsidy reductions, and attainment of fiscal discipline, he stated. He said government has announced some good steps towards agriculture sector. Agriculture is the backbone of the country for food security.
The announcement of conversion of 50,000 tube-wells into solar, duty reduction on the import of raw material of solar panels, batteries, and inverters are right steps towards energy mix in the country. Announcements related to education and youth skill development program, etc., are the goods steps the government is taking. However, he said that it was not an export-oriented budget. The finance minister did not announce any concrete steps towards exports enhancement.
Our cost of doing business is going up due to high electricity rates and unfriendly business environment in the country. He said that except agriculture, nothing was there in the budget speech for the rest of sectors. He proposed that agriculture sector should also come under the tax net. He termed the budget as election budget, and it is not going to be the final budget.
The implementation of withholding tax on cash handling is an adverse step and should be abolished. How will it be met? The economy is already slowing down. The Budget is silent on loss-making State Owned Enterprises (SOEs).
Looking at the current budget, it is very difficult to achieve 3.5% growth rate. Rs5 billion for the IT sector and for women entrepreneurs are insufficient. The IT sector is growing rapidly in Pakistan and its share in exports is also increasing rapidly.
The increase in foreign currency import limit up to 1 lakh dollars is welcome which will help to overcome the shortage of dollars in the country. Abolition of duty on machinery for solar panels, conversion of tube wells to solar energy and duty on seeds, youth employment scheme are welcome initiatives.