Businessmen hailing from different sectors praised the government for announcing incentives for textile and agriculture sectors and slashing duties on industrial raw material. However, they opposed the levy of withholding tax on withdrawal of amount of Rs25,000 or more from any bank. Lahore Chamber of Commerce and Industry (LCCI) senior vice-president Sohail Lashari has termed the proposed budget for 2005-06 as 'good'.
In his initial reaction, Lashari said the government has proposed to reduce duties on raw materials for four major sectors - agriculture, sports goods, leather and textile - which was a demand of the LCCI.
He welcomed reduction in duties on raw materials of plastics, soap and components of home appliances. He also commended cut in duty on tractors, ginned cotton, poultry feed, vitamins and others.
He said the target of Rs 690 billion for revenue collection and enhancement in development fund was also a good step. He said revenue target was achievable as mindset of taxpayers and tax collectors had changed and now the business community was paying taxes.
"We had to sustain the growth rate shown by the economy this year while efforts must be made to arrest increasing inflation," he said.
He also hailed the government for increasing salaries and pensions of employees and introducing scheme to waive small loans of the House Building Finance Corporation.
He said it is a welcoming sign that the government had started paying attention to look for alternative sources of energy.
Sohail Lashari said reducing duties on import of cars was also a welcoming step but it must be brought down further. However, he criticised the levy of 0.1 percent withholding tax on drawing of amount of Rs25,000 or above through a cheque.
LCCI vice-president Sheikh Muhammad Arshad said very good step had been announced in the budget for the year 2005-06 such as reduction in customs duties for industrial raw material.
He also hailed export-oriented industry had been given relief under the head of sales tax, besides giving incentives to textile, sports goods and leather industries. He said duty on import of tractors had also been slashed from 20 to 15 percent.
LCCI executive committee member Irfan Qaiser dubbed the budget for 2005-06 as 'poor-friendly' in which raise had been proposed in pays and pensions and minimum wages.
He said cut in duties on import of cars, urea and import of 10,000 duty-free tractors are welcoming.
Irfan Qaiser said bringing down sales tax to zero percent on import of raw materials used in the textile sector was another positive step announced in the budget.
Under this head, the government was collecting Rs 22 billion per annum, while it was paying Rs 33 billion to textile industry as refunds. By taking this step, the government would save Rs 9 billion per annum.
All Pakistan Cottage Industry and Small Traders Association chairman Ghulam Sarwar Malik said in his reaction that the government has totally ignored the cottage industry in the budget for the year 2005-06.
He claimed that this segment constitutes 85 percent of businesses but they had been ignored.
Pakistan Industrial and Traders Associations Front (Piaf) acting chairman Mubashir Sheikh in his initial remarks said budget proposals are looking good at the moment.
He said people would prefer to keep cash at home and it could enhance incidents of theft and dacoity. He also said minimum wage slab should be fixed at Rs3500 instead of Rs3000.
In his opinion, the government should also avoid depending on indirect taxes, as it would continue pushing the price index upward.
Another LCCI executive committee member Majid Abdullah welcomed steps announced by the government for development of agriculture sector, such as incentives on import of urea, machinery and components of feed for poultry industry, import of duty-free tractors and others.
However, he was of the view that they were expecting some steps to cut down the trend of price increase in property, which had not been touched in the budget speech.
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