The prominent bigwigs of Karachi Chamber of Commerce and Industry (KCCI) have termed federal financial budget for 2018-19 as an 'election budget,' expressing apprehensions over its implementation because it depends upon caretakers and the next full-fledged government. Their take had it the 'election budget' could be followed by a mini-budget by caretaker government or by the full-fledged government after elections.
"This budget looks relatively better than all the previous financial budgets presented by PLM-N government during its 5-year tenure," Siraj Kasim Teli, leader of Businessmen Group (BMG) and ex-president of KCCI, said, adding that incumbent government has accepted a basic demand of Karachi chamber by curtailing powers of tax commissioners.
He welcomes the decision of selection for audit in respect of all three taxes; Income Tax, Sales Tax and Federal Excise Duty which had been made risk based and a case shall not be audited more than once in three years for each tax. He said concept of composite audit would also be introduced to ensure that audit of tax affairs under all tax laws is undertaken simultaneously to avoid inconvenience to the tax payers.
He criticized the move of reducing tax on banking transactions for non-filers from 0.6% to 0.4% on a permanent basis. This concession should be for tax return filer, he demanded. Referring to corporate tax, Teli said reduction of corporate tax rates from 30% in tax year 2018 to 25% in tax year 2023 is welcome decision. The corporate tax rate will be 29% in tax year 2019. However, he expressed his apprehension about reducing tax by one percent every year.
He noted few years back, similar policy was announced to reduce tax by one percent every year. For first year tax was reduced by one percent and after that the policy was scrapped. Incumbent president of KCCI, Muffasar Atta Malik, said that announced establishment of water desalination plan for Karachi is a welcome move because it would help overcome water shortage in the city. However, he anticipated that the next government may bring a mini budget.
"The proposed fiscal budget will get effective from July 1 and by that time caretaker government will replace present set-up," he said, adding that it is big question either they implement these budget proposals or bring their own mini budget. He said it also remains uncertain whether the next government to be formed after elections would continue this budget or bring their own budget.
KCCI's ex-president Zubair Motiwala said that although overall budget is looking good, the issue of refunds is still not resolved. He said final comments could only be given after going through budget documents. Haroon Farooki, another former president of KCCI called it an 'election budget'. He said the biggest relief was provided to salaried class including government's and private sector's employees. He clarified the KCCI was not providing budget proposals for last two years.