ISLAMABAD: The Islamabad Chamber of Commerce & Industry (ICCI) expressing serious concerns over some taxation measures proposed in budget 2019-20 has said that it would trigger new wave of inflation in the country making the life of common man more miserable leading to further slump in business and economic activities.
In a statement on Friday, Acting President ICCI Rafat Farid said that the incumbent government in its first annual budget has proposed higher taxes on many items being used by the common man including sugar, milk, soft drinks, garments, cooking oil, cement that would promote cost push inflation and put extra burden on the general public.
He said that goods like auto parts and accessories, biscuits, confectionery items, chocolates, toffees, candies, tiles and arms previously exposed to extra tax will now be subjected to sales tax at standard rate that would also give rise to more inflation.
The Acting President ICCI said that no concrete measures have been proposed in the new budget to boost exports despite the fact that Pakistan badly needed to enhance exports for reducing current account deficit and threats to external sector of its economy.
He said instead of facilitating exporters in the new budget, government has withdrawn zero rating for five export-oriented industries that would further hurt the exports.
Rafat Farid urged that government should take strong measures to protect the domestic industry as strengthening the domestic industry was necessary to promote industrial activities, investment and create new jobs for the youth.
Vice President ICCI Iftikhar Anwar Sethi said that government has set an ambitious tax revenue target of over Rs.5.5 trillion in budget 2019-20. However, he said that Ministry of Finance has estimated economic growth rate to further slowdown to 2.4 percent while inflation to rise to 13 percent.
Iftikhar Anwar was of the view that without accelerating economic growth and bringing revolutionary reforms in taxation system to reduce trust deficit between taxpayers and tax collectors, it would be very difficult for the government to achieve the new tax revenue target.