Lahore - The business community expressing positive feelings on government Economic Reform Package (ERP) or mini budget termed it a positive for some businesses in the short run, but criticized lack of measures to address the burgeoning fiscal deficit of 6-7% of GDP in FY19.
The govt announced the much anticipated mini-budget also known as Economic Reform Package (ERP). Contrary to expectations, the bill announced had few revenue generating measures while it was more tilted towards giving relief to stock markets, local manufacturers, exporters, Small and Medium Enterprises (SMEs) and farmers.
LCCI President Almas Hyder, while addressing a Press Conference, said that measures announced in Finance Amendments Bill 2019 will support the industry. He said that measures for ease of doing business, elimination of withholding tax on banking transactions were longstanding demand of the Lahore Chamber of Commerce & Industry.
He said that removal or decrease in Regulatory Duty on 150 items will bring down the cost of doing business, will discourage smuggling and enhance competitiveness of the industry.
He said that production of car industry was fallen up to 30 percent because of difference between filer and non-filer. Permitting filer to purchase vehicles will expand the size of auto industry.
Focus on better conditions for investment is good because investment always play the role of oxygen for economy. Investment should be encouraged in all sectors of economy.
PIAF former chairman Irfan Iqbal Sheikh termed cuts in regulatory duties on raw materials as a much-needed catalyst to boost industrial production, but feared that a hike in oil prices might weaken their competitiveness in the international market.
The PIAF leadership appreciated the mini-budget, terming it moderate, however, some businessmen called it a typical approach accompanied with a typical speech to tax the already taxed.
Businessmen said that cost of doing business in Pakistan is higher because of high rate of duties and taxes on industrial raw materials and machinery. Lowering the duties and taxes on essentials for industry will certainly boost the local industry and help exporters but further reduction or elimination is needed.
APBF President Syed Maaz Mahmood said that although relief in power sector was much appreciated however government should consider that there are huge imports of industry’s raw material and a policy should be well defined for this production related imports.
He said that PM Imran Khan and Federal Finance Minister Asad Umer should focus on the cost of production and take measures in this regard. He urged that not only in the “Mini-Budget” but also in national budget to provide relief in industry’s cost of production should be the top most priority of policy framework.
Maaz Mahmood further added that infrastructural issues are one of the basic reason of increased cost of doing business and production, especially the Industry of Punjab is suffering a lot for this, we need a special package for the prosperity of industry established in the province, he added.
Maaz recommended that raw material, which was not produced in Pakistan, should be exempted from the import duty to support the export-oriented industry.
He said the government needs to take corrective measures against smuggling to safeguard the local industry. He also argued against the proposal to slash the public sector development programme in last mini budget.
PIAF chairman Mian Nauman Kabir welcomed the proposal to remove regulatory duty on the import of raw materials for the export-oriented industry, and extended support for narrowing down the trade deficit. However, we are still not aware of the items on which the import duty has been removed. After reviewing this list, we will be in a better position to suggest the impact of this development, he added.
The FPCCI former president Mian Idrees also termed the amended finance bill for fiscal year 2018/19 moderate, and said it would generate additional revenue for the cash starved country.
He said that tax exemption facility to the industries in SEZs is a good step but same facility should be given to the industrial expansions.
He said that tax exemption for the manufacturing of equipment for alternative energy will reduce dependence on traditional methods of power generation. He said that removal of super tax will give boost the manufacturing sector.