Unclear budget will lead to price hike: Traders

KARACHI: Traders and dealers of various sectors have termed the budget “totally unbalanced and unfriendly.”

Speaking to The Express Tribune on Saturday after the announcement of the budget, they said that due to an indirect impact, prices of goods are expected to rise in coming days.

Chairman of Karachi Wholesale Dealers Association, Anis Majeed expressed his concern over the budget which, he said, while providing relief on the one hand, was also putting additional burden on the people through indirect taxes.

He explained that the increase in withholding tax on imports by five per cent was going to lead to a rise in prices of essential commodities as the importer/dealer is bound to pass on the extra amount to the consumers. He said that while the government had not offered any clear incentives to the agricultural sector, which in turn was not likely to impact the commodities market, the increase in withholding tax would have an adverse impact.

He said: “We have to import goods as we are not able to meet the demand of the consumers. Commodities like rice, wheat and edible oil are likely to show a price hike of as much as 10 per cent as the additional costs of doing business are always passed on to the consumers.”

Referring to the issue of value added tax, Majeed was of the opinion that it was not going to be any different from the general sales tax and the name had just been changed.

Chairman of Karachi Electronics Dealers Association, Mohammad Idrees said that the imposition of 10 per cent tax on refrigerators and air conditioners was an unwise move as the two items are a necessity now and not a luxury anymore.

He said that this is going to affect the prices significantly as the value of these white goods would rise steeply, which in turn would impact the middle class as their income continues to remain static while prices of most goods are increasing.

H M Shahzad, Chairman of All Pakistan Motor Dealers Association, said that the people of Pakistan had been eagerly waiting for the much-hyped people-friendly budget. However, the budget that had been announced on Saturday was one of the most disappointing budgets as “it did not seem to be people-friendly at all”.

Shahzad also said that in the budget speech there was nothing with regard to the automobile sector, and therefore, he did not think that the said sector would be affected in any way.

Published in the Express Tribune, June 6^th, 2010.