Tax experts, business community express mixed views

Tax experts and business community have expressed mix views on budget 2011-12. Commenting on budget 2011-12, chairman Association of Builders and Developers of Pakistan (ABAD) Babar Chugtai said the government has not favoured construction sector in the budget to escalate the pace of economic activities. He said the government has presented a speculation based budget, which would not create positive impact on the masses.
He said that although the government has reduced federal excise duty on cement, the same would not be transferred to the industry because of cartelisation. Babar said the tax relief on raw material should have been provided to the industry to meet the growing demand of houses besides creating more employment opportunities in the country.
Khushnood A Khan, President, Karachi Sales Tax Bar Association (KSTBA) termed the budget 2011-12 as unfriendly for common man. He said the government has withdrawn special excise and regulatory duties in this budget but the impact in this regard would be absorbed by the industrialists. He further said the tax relief could only be transferred to the common man, if the abandoned price control system would be reactivated with true spirit.
However, Abdul Qadir Memon, a member of revenue advisory council opined that the government has presented a reasonable budget amid worst economic crisis. He said the sales tax reduction by one percent is a part of a package where on the other hand the government has withdrawn zero rating and tax exemptions. He said the revenue target has been fixed to Rs 1,952 billion for 2011-12 hence no anti-inflationary impact would be expected in coming fiscal year.
He said the government should have principally removed withholding tax on cash withdrawal as the reduction of 0.1 percent in the same would not yield fruits. Meanwhile, Younus Somroo, president Karachi Custom Agents Association (KCAA) said this budget would not bring any considerable change in custom tariff.
He said that although the government has announced strategy to deal with Afghan Transit Trade, the same could not achieve success without tariff rationalisation.