LCCI gives mixed reaction to federal budget

By Our Correspondent
June 13, 2024
The Lahore Chamber of Commerce and Industry (LCCI) building in Lahore. — Facebook/Lahore Chamber of Commerce & Industry/File

LAHORE: While appreciating some of the pro-business measures in federal budget, the Lahore Chamber of Commerce and Industry (LCCI) on Wednesday showed concerns over some of the taxation measures that are bound to jack up cost of doing business besides decelerating economic activity.

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In his address following the budget announcement, Lahore Chamber of Commerce and Industry President Kashif Anwar gave mixed reaction, noting that while there are positive aspects, but there are significant challenges as well.

President Kashif Anwar remarked that apparently this is a difficult budget, which will be little beneficial for the economy. He emphasised the need for consultation with the stakeholders, stating that this budget will not provide the necessary support for the manufacturing and exports or the economy. He pointed out that imposing federal excise duty on cement and property and removing import duty on glass and imposing FED on immovable propert will hinder business operations. He stressed the importance of eliminating non-documented sectors alongside increasing documentation and questioned how construction would increase when capital gain tax has been imposed on real estate and property.

He highlighted that raising the advance tax to 2.25 percent will increase cost for manufacturers and retailers. He warned that increasing tax rates in this manner invites tax evasion. He showed concerns on the budget and argued that excessive tax rates will negate potential benefits. He said that in these challenging times, increasing the sales tax rate from 12 percent to 18pc percent for tier 1 retailers will hinder documentation efforts. He urged for a simplified tax system, stating that no trader is afraid of paying taxes but is wary of excessive regulatory powers.

Addressing the increase in duties on electric cars, mobile and scrap, Kashif Anwar pointed out that imposing Additional Customs Duty on products not manufactured locally will raise the cost of doing business.

Kashif Anwar acknowledged positive steps for the solar sector but cautioned against implementing certain measures. He mentioned that many documents and SROs are yet to come and expressed concern that the current budget will exacerbate inflation and create hurdles for industrialisation and economic activity.

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