The Federal Excise Duty (FED) levied on the brokerage commission (currently 16 percent) should be reduced as it has increased the cost of trading for investors, which will enhance trading volume, besides developing the confidence of investors. The expiration of 15 percent flood surcharge on share transaction, which was introduced in March 2011 will provide a small breather for investors as cost of trading will decline marginally, otherwise earning growth will reduce to 4 percent from 13 percent.
The investors' biggest concern remains low volumes after imposition CGT, LSE average volume is down more than 50 percent YTD and that is why the quantum of foreign flows is also being affected. So CGT should be exempted for the next three years. Taxes on new and undocumented/informal areas like agriculture and real estate should remain the major concentration of the new budget.
The government should put fully concentration on energy crises and also announce tight gas policy, any development on the tight gas policy bodes well for oil exploration and production as it will significantly enhance oil and gas production. If government want to increase the production level (GDP) the government should immediately resolve the energy crises and provide electricity at cheaper rates.
Due to some control in government borrowing from State Bank of Pakistan, comfortable current accounts and stability in inflation interest rate should be brought down to provide cheaper financing to the economy. The government should immediately resolve the gas problem for fertiliser sector to increase the production of fertiliser. This act will reduce the import of the fertiliser-related items. So, 17 percent GST on fertiliser may be reduced; this in return will increase the usage of fertiliser, which will affect the output of agriculture sector.-PR
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