Revenue target unrealistic in recession; no focus on economic priorities: FPCCI

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday termed revenue collection target for the next fiscal year as unrealistic during the recession, saying the government showed lack of focus on economic priorities in the budget.

FPCCI President Anjum Nisar said the budget was traditional as no focus was given on changing economic priorities.

“It’s a recession and revenue targets could not be achieved,” Nisar said, addressing a post-budget conference. “Last year budget targets were revised thrice while agriculture sector was there to support GDP. However, this year locust has also affected agriculture sector.” Niar said preparing a balanced budget in the midst of coronavirus epidemic, which has already inflicted Rs3 trillion losses to GDP, “was no joke”. “While the government set realistic growth target for the next fiscal 2020/21, the revenue collection target appears to be more unrealistic than what was set for fiscal year 2019/20,” he said.

FPCCI president said the demand for restoring the zero-rating facility and proposals of the textile export sector has been disregarded. There is no support / policy for small and medium enterprises – the most vulnerable sector under the current crisis. The issue of CNIC issue is not resolved. Further, sale tax rate, corporate tax and turnover tax rates were not reduced. No clear cut policy on demurrage has been announced. No time is fixed for deciding appeals as appeals have been pending for decision for the last three years. Turnover tax, withholding tax for distributors and tax for small and medium enterprises were not reduced.

Nisar, however, said the exemption of additional custom duties on tariff lines and tariff rationalization by reducing customs duty on 90 tariff lines from 11 percent to 3 percent and 0 percent were good steps. Further, there was reduction in regulatory duty from 12.5 and 17.5 to 6 and 11 percent on hot rolled coils of iron and steel. A number of industrial inputs/intermediary raw materials are allowed concessional import under new serial number of the fifth schedule. “Reduction in regulatory duty on smuggling prone items would bring these items under legal imports and regulatory duty on several industrial inputs is also being reduced to decrease their cost of doing business,” he said. The government provides incentives to soap manufacturing industry by reducing rate of additional customs duty on palm stearin. Issues pertaining to commerce and trade are still outstanding and could have been addressed in this budget. Ease of doing business still has room for the improvement, amid pandemic COVID-19. “The government has neglected major portion of sectors though has considered cement Industry and has increased capital gain.”