President American Business Forum (ABF) Salim Ghauri has welcomed the federal budget 2012-13 and expressed the hope that it would strengthen business activities amidst elections ahead.
He has also congratulated the federal government for presenting the fifth budget successfully, and appreciated it for fulfilling the business community demands in the budget.
As the profitability levels are extremely low due to unprecedented energy shortfall in the country, Salim said the business community will benefit from reduction in turnover tax from one percent to 0.5 percent.
Also, he said that reduction in withholding tax on bank withdrawal by enhancing a minimum limit to Rs50000 from earlier Rs25000 will also be helpful to many Small and Medium Enterprises (SMEs). Streamlining the Sales Tax at 16 percent on all segments, particularly the essential items would also reduce the tax burden on common man, he added.
President ABF said that the increase in salaries by 20 percent, reduction in turnover tax by half, increase in minimum limit of bank withdrawals for tax deduction, and enhancing the Income Tax exemption limit to Rs400000 from Rs300000 are the major steps that have been taken in the budget.
He said in a situation where the trade balance fiscal deficit, internal borrowing and rupee depreciation are in negative zone, it is the most difficult budget ever presented by the federal government.
Salim said that the reduction in Federal Excise Duty on 10 items, subsidy on solar tube wells and a promise by the federal finance minister to provide funds for energy needs will bring a pivotal change in the economic situation of the country. It seems to be a sort of balanced budget, he added.
President ABF said that energy shortage is the biggest challenge to overcome for the federal government ahead. According to him, it is high time to meet the deficit of Rs400 billion under the head of circular debt. He said the government has allocated a subsidy about Rs184 billion in the budget but there is no clue how the rest of the gap would be met with to overcome circular debt.
Salim said that the budget is missing the growth strategy, which is a biggest need of the hour. He said that the government should give a policy to attract investment to the country, as well as push the investors to bring money back to country. He said that the high interest rate has already plagued the economy and the government itself is the biggest borrower. He said that there is a need to stabilize the rupee value in order to strengthen the economy.
