LAHORE: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called for amendments in the federal budget before the approval of finance bill in the national assembly.
Addressing a press conference here on Monday, FPCCI President Mian Anjum Nisar termed the recently-announced Federal Budget 2020-21 as status quo and conventional, as the bureaucracy has tried to further accumulate its powers through this opportunity. Moreover, the budget provided nothing to run the industry or sustain the country's exports in post-corona slowdown, besides putting an adverse effect on the prime minister's policy to generate millions of jobs in the country.
The press conference was also attended through video link by the FPCCI office-bearers of Karachi and Islamabad offices. Regional Chairman Dr Muhammad Arshad and LCCI former president Muhammad Ali Mian also spoke on the occasion.
He said most of the FPCCI suggestions were ignored and just few recommendations were incorporated in the budget. He said the mandatory CNIC condition for business transactions of Rs 50,000 and above had been creating a lot of problems for the business community besides sending lot of money out of the economy. The government should have abolished that condition in the current fiscal year budget to facilitate the smooth growth of business activities. Instead of abolishing that harsh condition, the government just enhanced the limit of transaction amount for CNIC condition from Rs 50,000 to Rs 100,000, which could not bring money back into the economy and give no boost to business activities, he said.
He said businesses were already suffering huge losses due to the Covid-19, so in those circumstances the government should refrain from imposing conditions that were making it difficult to promote businesses. In the first step, the government would have to document the economy then it should implement the CNIC condition, he suggested.
Nisar expressed serious concerns over severe liquidity crunch of the trade and industry both domestic as well as the export-oriented sector owing to non-payment by the international buyers amidst worldwide lockdown due to pandemic, creating a risk of millions of workers rendering unemployed. He said the financial losses to the trade and industry had been multiplying every day and they were facing severe liquidity crises. He said with a view to keep the industry live major problem was cash flow which could be resolved through an early refunds system, cut in taxes and markup rate.
He said FPCCI was expecting withdrawal of discretionary powers of FBR chief commissioners which are the major hurdles in tax net improvement. By enhancing discretionary powers of tax officials, the government had further created troubles towards documentation of the economy, he added. He called for immediate rectification of anomalies in the budget by reducing the ratio of harsh taxation, in consultation with the FPCCI, which was the elected apex body of the trade and industry.
The FPCCI appealed the government for amendment in the budget to restore the zero-rating facility to the export-oriented sectors, as the withdrawal of this facility had a tremendous impact on the growth and development of that sector.
"We are paying all expenses including wages of workers, markup of loans, power and gas bills and building rentals despite closure of the industry for a long time," he said.
The FPCCI president, however, welcomed the reduction of customs duties on 40 raw materials of various industries, besides lowering this duty on 90 tariff lines from 11 percent to 3 percent in the federal budget 2020-21. "We appreciate that the government has reduced federal excise duty on cement which will reduce the price of cement and boost construction activities." He also called for reducing income tax slabs in line with the trends of the global economies while the number of taxes in the country was very high contrary to the rest of the world, which was also a major hurdle in the FDI (foreign direct investment) towards the country.
He also held the FBR responsible for backtracking from a signed agreement with the retailers of the country where the tax machinery committed to slash down minimum tax from 1.5 to 1 percent and withholding tax on all supplies from 4.5 percent to 1 percent in the budget 2020-21.
The FPCCI President asked the Prime Minister to take action against those port terminals, which had continuously been violating the government advice to relax detention and demurrage charges at least during the lockdown period. "FPCCI has continuously been requesting the Ministry of Maritime Affairs to instruct all the port terminals and shipping lines not to charge demurrage and detention during the lockdown period. Now we request for refund of demurrage, detention and other charges to those importers who have paid them to clear their consignments during this period of lockdown," he added.
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