OICCI terms budget balanced

The budget 2010-11, excluding a few exceptions, appears to be a balanced budget, according to the Overseas Investors Chamber of Commerce and Industry (OICCI).

An OICCI press release in Monday stated that members hoped that the government will make the difficult decision of broadening the tax base and adopting taxation policies that will encourage foreign direct investments on a sustained basis.

The chamber added that it hoped that the government will utilize this time in laying a solid infrastructure for the launch of Vat.

Whereas the government has made headway into easing out the problems faced by the business community, the OICCI press release stated, there are still certain grey areas left that have brought along with them negative implications for the economy at large.

The OICCI pointed out three major areas of concern for the investor community.

These are the increase in the turnover tax rate from 0.5 per cent to one per cent, the one per cent increase in the General Sales Tax (GST) from 16 per cent to 17 per cent and the imposition of 0.3 per cent withholding tax (WTH) on all modes of banking transactions in excess of Rs 25,000 per day including demand draft, pay order, etcetera.

OICCI recommended that the government take notice of these issues, specially the WTH tax on banking transactions, as it may affect deposit mobilization and promote cash transactions.

Published in the Express Tribune, June 8^th, 2010.