Business community gives mix reaction to budget

President Hyderabad Chamber of Commerce & Industry (HCCI) Goharullah, while commenting on Budget 2011-12, said that this budget is good for government servants. However, he said that budget policies should have been clearer for the benefit of industries and trade.
He said that one-percent deduction in General Sales Tax is a good step and is welcomed, but no new tax in lieu of this deduction should be imposed. He said that the new budget lacks chamber's recommendations, causing concerns among the business community. It also lacks short-term policies for meeting gas and electricity challenges. Under the present circumstances, industries cannot coupe up with their production requirements, he added.
He advised that there should be some provision in the annual developmental plan about provision of industrial infrastructure on modern lines so that the public and private efforts to attract foreign investment in the country could be fruitful. He added that under "Benazir Income Support Programme", people should be trained to earn livelihood by themselves. He appreciated additional allocation of funds in the budget for education in the country.
Vice President HCCI Ziauddin said that for the development of agriculture sector no special incentives was offered and no policy regarding export of fruits and vegetables announced in this budget. He said that reduction of one percent in GST is a good step but the target of 1,952 billion rupees set by FBR appears to be over ambitious. To achieve this target, government might have to take advantage by issuing SROs.
He feared that reduction of GST might cause decrease of 40-50 billion in the overall income of the federal government. He further said that in the budget, an important sector of cellular users was ignored as no incentives have been given to them.
Former President HCCI and Chairman Inland Revenue Sub-Committee, Haji Muhammad Yaqoob said that the actual outlines of the annual budget would be clear only after its details have been announced. He, however, said that withdrawal of regulatory duty on 392 goods could control to some extent the smuggling being done on the pretext of Afghan Transit Trade. He added that with this action, local manufacturers would be benefited.
Further speaking about taxes, he said all sectors should be compelled to pay taxes. The upper limit of annual income of Rs 350,000 has been made tax free when we were demanding that it should be fixed at Rs 500,000/-, he added. He further said that reduction in the rate of withholding tax on withdrawing money from banks is a good step. However, business community believes that all sectors be treated equally; if Rs 350,000/- has been fixed as tax free annual income then everyone earning annual income above this limit be charged Income Tax regardless of which source it was earned.
Yaqoob further said that the revenue target of 1,952 billion fixed for FBR appears to be on higher side, it should be reduced while for the development of industrial and business sectors, taxation system should be simplified. Income tax and Sales Tax returns should also be simplified so that everyone can file them with ease and honour, he added.