Karachi, June 15, 2022: Mr. Shabbir Hassan Mansha, Acting President FPCCI, has stated that the federal budget 2022 – 23 is mixed and devoid of categorical explanations on various budgetary and fiscal initiatives. Conversely, the business community was expecting an industrial package to propel the country into the much-needed industrialization and import substitution mode. The business community is concerned at the imposition of wealth tax on tax-paid assets as well, he added.
Acting FPCCI Chief welcomed the emphasis on setting up special economic zones (SEZs) under CPEC and also commended the imposition of fixed tax on small retailers; as it will make it viable for them to register into taxation system.
Mr. Shabbir Hassan Mansha expressed his dismay that FPCCI, being the apex body, had proposed to the government to announce a comprehensive industrial package; as there is no other way to control the unsustainable trade deficit contributing to current account deficit that will be $47 – 48 billion this year; gradually reduce debt servicing of Rs. 3.95 trillion; protect the ever-depreciating rupee resulting in massive fuel and power inflation; dwindling foreign exchange reserves; growth rate which is grossly insufficient to match the population explosion; increasing unemployment and curtail the budgetary deficit through generating more taxes through productive activities – not through squeezing the existing taxpayers even further.
Addressing the other area of concern, Mr. Shabbir Hassan Mansha said that remittances have recorded a significant decline of 25 percent in May 2022 on a Month-on-Month (MoM) basis; and, FPCCI had categorically proposed to incentivize and facilitate the remittances. FPCCI recommends opening selected commercial bank branches 24/7 in all major cities and towns of Pakistan to facilitate remittances – taking care of time lapse in emergency circumstances and varied time zones.
Mr. Shabbir Hassan Mansha noted with a sigh of relief that zero tax has been levied on agricultural machinery and inputs, which was a major demand of FPCCI; given the food security situation of the country. Exempting tractors and seeds was critically needed and the government listened to us on the issue, he added. However, fertilizers should also have been exempted as well as it is one of the major inputs for higher yields.
Mr. Shabbir Hassan Mansha appreciated the relief to middle class for making taxable salaried income threshold Rs. 100,000 per month from the current Rs. 50,000; and, also providing relief to micro and small businesses by raising the minimum tax bracket from 0.4 million to 0.6 million.
Mr. Shabbir Hassan Mansha maintained that property tax of 1 percent on properties worth over 25 million should be reconsidered; as in the times of crises, all segments and sectors of the economy should be supported. It is pertinent to note that real estate and construction sectors directly or indirectly accelerate growth in 40 industries, he added.
Acting FPCCI Chief expressed his satisfaction over the logical and much needed decision to exempt solar panels from sales tax and also on their distribution. He added that it will facilitate the migration to solar power for households and SMEs.
Mr. Shabbir Hassan Mansha said that budget allocations for education and health are insufficient as inflation has eroded the purchasing power parity (PPP) of rupee; low-income segments have been crushed to the extent that they cannot bear these expenses themselves and public health infrastructure is in an abysmal state. He has called for at least 40 – 50 billion allocation for developing and maintaining public sector healthcare infrastructure; instead of the earmarked Rs. 24 billion.
Acting FPCCI Chief noted that 15 percent raise in salaries of the government employees is though not enough; but, will surely provide some breathing space to them. He also maintained that it remains to be seen whether the promise of zero load shedding to industries is fulfilled or not as there no plan of action has been shared with the business community.