Government math on additional tax revenue based on ambitious assumptions

KARACHI: The government’s goal to shrink budget deficit on additional revenue assumptions of Rs500 billion in the next fiscal year is over ambitious, apex trade body said on Friday.

Zubair Tufail, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on behalf of the entire business community said finance minister Ishaq Dar announced relief, incentives and some punitive measures for non-compliant taxpayers in the budget speech, which appeared to be a balanced budget.  “But he (finance minister) does not highlighted the measures to be taken to achieve targeted revenue collection of Rs4,021 billion,” Tufail said. “The FPCCI would give its reaction on the budget tomorrow after reading the documents. However, apparently the budget speech reflected good growth in the economy.”

He said the finance minister had again promised to release outstanding sales tax refunds against Refund Payment Orders (RPOs) issued by April 30, 2017 in two phases.  Tufail expressed the hope that the government would release entire stuck-up amount by August 14.  On an increase in the federal excise duty from Re1/kg to Rs1.25/kg on cement, the FPCCI president said cement manufacturers earn huge profits and they should absorb this increase in their profits instead of passing on to the consumers.  He expressed satisfaction on the announcement of addition of another 10,000MW to the national grid by 2018 and 15,000MW in the next five years. This would increase industrial productivity, he added.  Siraj Kassem Teli, leader of the business community and former president of the Karachi Chamber of Commerce and Industry (KCCI), said that this is the fifth and last budget of the present government and there is marked improvement in attitude of the finance minister.

Due to the election year, there are a number of reliefs in the budget speech, he said, adding that there are incentives for the industries also.  The budget for the next fiscal year is more balanced than the previous budgets announced by this government.

Teli said that there is no increase in the Federal Board of Revenue’s (FBR) collection so the government will take some additional measures to generate Rs500 billion tax revenues in the next fis al year.  Zubair Motiwala, former president of the KCCI, said that the finance bill would decide positive or negative impact of the budget.  The government’s intention clearly showed that the existing taxpayers would not be burdened and it would target the non-filers.