The Overseas Investors Chamber of Commerce and Industry (OICCI) has appreciated the efforts of the government in announcing a positive budget, impacting trade and salaried class, despite the economic difficulties prevalent in the country.
In a comment on the budget here Monday, OICCI said it welcomed the reduction in turnover tax to 0.5 %, rationalization of sales tax to 16%, reduction of duty on tea and on a few pharmaceutical raw materials, reduction in income tax on salaries and increase in the investment limit.
“The proposed tax on Capital gains on property is a move in the right direction. Some important anomalies have however not been addressed including the demand of oil refining and marketing companies with large turnover and restricted profitability for a reasonable turnover tax rate”.
OICCI said it lacks concrete incentives to activate foreign direct and local investment especially in industrial and employment generating activities so critical for economic development of the country.
OICCI President, Humayun Bashir said that the Budget 2012-13 appears to be quite traditional without any bold initiative to tackle the grave economic situation of the country.
However, he said both the revenue and expenditure forecast for
2012-13 seem ambitious. In terms of taxation, the total target of Rs.
2.38 trillion, which is about 22% above the expected collections in the current fiscal year, appears to be very high, considering the 4.3%
GDP growth forecast for the next fiscal year. President OICCI further added that the government should have announced some measures to halt the rupee depreciation as well as tangible initiatives for the improvement of energy supplies to business and industry and cut in corporate tax rates.
The Budget 2012-13 does not seem to have addressed the core issues of Energy shortage, ballooning circular debt and high interest cost.
Humayun said OICCI continues to support significant and bold measures to urgently broaden the tax base and document the economy and to do away with all amnesty schemes.
OICCI also support demand for filing of tax returns and Wealth Statement by all income earners over the Rs. 350,000 (now Rs. 400,000 proposed) threshold. Moreover, the federal government should work closely with the provincial government to introduce taxes on provincial subjects including on agriculture income.
