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Saturday July 13, 2024

Businesses slam mini-budget, question taxation measures

By Tanveer Malik
February 16, 2023

KARACHI: Business community on Wednesday strongly reacted to the mini-budget presented by Finance Minister Ishaq Dar, and said the taxation measures were taken without consulting businesses, which would be burdened in the coming days.

However, the representatives of the community believed that the government’s only option out of the current economic crisis was the International Monetary Fund (IMF), on whose conditions, the new taxation measures have been introduced in the form of the mini-budget.

They feared that the cost of doing business would further escalate because of the new taxes or the increase in the rate of taxes, and businesses would be facing serious issues in running their operations in the era of high inflation.

They said that non-opening of letters of credit was adversely impacting businesses in the country and if the issue was not resolved, more industrial units would be forced to shut down their operations. This, they pointed out would also result in joblessness in the country.

The poor segments of the society would be particularly impacted as the general sales tax has been increased by one percent across the board, which would be added in the prices of consumer items. Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh told The News that businesses have been already burdened due to high inflation and now the new taxes would be adding more to their miseries.

Prices of gas, electricity and fuel have already escalated the cost of doing business in the country and now taxes would be an added burden.

He pointed out that though the new taxation measures have been taken on the demand of the IMF, the bigger issue of receiving certification from the IMF has not been achieved.

“Pakistan is already over twenty percent costlier than Bangladesh in terms of cost of doing business due to high interest rate, rupee devaluation and cost of utilities,” he said. Amidst these problems, the biggest issue was the uncertainty in the country, which was hitting businesses more as there was no direction to devise any future strategy. He deplored that the government did not take the business community on board before announcing the mini-budget to take their input for it.

He said that productions at the industrial units were on the lower side and now would be impacted more adversely because of the mini-budget. Karachi Chamber of Commerce and Industry (KCCI) Senior Vice President Tauseef Ahmed said that though the government has no option but to increase the taxes on IMF conditions, these measures would have inflationary impact on the prices of consumer items. He said that the poor segments would be particularly affected by the mini-budget. Ahmed said that the biggest issue was the non-issuance of credit letters, which has cut the production capacity by 50 percent. He said that if the issue was not resolved, industry would shut down.