FPCCI says enhanced taxes will fuel brain drain

KARACHI: President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Atif Ikram Sheikh and former federal commerce minister Dr Gohar Ejaz, who are jointly chairing the FBR’s Anomaly Committee 2024 from the business side, called a high-profile meeting of all chambers, trade bodies and associations at the FPCCI on Friday.

The meeting was held to discuss the anomalies in the Finance Bill 2024-25 and the budget in detail on a sector-to-sector basis. According to the press release by the FPCCI, Atif Ikram Sheikh will soon present the dossier of the anomalies identified by experts to the finance minister so that the government’s economic team and the prime minister can either remove or resolve the anomalies present in the budget.

During the Friday meeting, Atif Ikram Sheikh explained that “the FPCCI will provide the government with a collective, aggregated, comprehensive and descriptive list of anomalies that are creating confusion, discontent and apprehensions among businesses. We deserve a friendly budget for businesses, industries, exporters and the economy.”

The president of the FPCCI said that one of the primary measures in the budget that needed to be reviewed immediately was the withdrawal of the fixed tax regime. “Exporters across all industries have unanimously demanded that the fixed tax regime should be restored under which 1.0 per cent tax on export proceeds is levied. Exporters are the backbone of the country’s economy, and this particular anomaly needs to be addressed as top priority to protect them.”

Dr Gohar Ejaz stressed that “it is imperative to amend the finance bill to take out its regressive and contractionary measures to keep the economy afloat; curtail inflation; keep current account deficit in control; enable exporters to grow; create jobs; and generate revenues.”

Dr Gohar Ejaz added that Pakistan’s trade and industrial sectors are “already at a disadvantage as compared to the region due to the unbearable cost of doing business, which has been driven up due to electricity and gas tariffs; inflationary pressures in the economy; and inconsistencies in economic policymaking.”

SVP of the FPCCI and focal person for anomalies in the FY25 budget Saquib Fayyaz Magoon said that “the imposition of enhanced taxes on the salaried class will further fuel brain drain from Pakistan which is already suffering a shortage of the skilled workforce for its industries. In view of fairness, the government should not tax the already taxed even further.”

Magoon further said that “the FPCCI advocates that the finance bill should be amended in a way that promotes industrialization in the country; facilitates import substitution; empowers youth through skill development; diversifies export basket; promotes IT & other emerging technologies; and reduces the cost of doing business.”