‘Further taxes will be detrimental to economy’

Official urges govt to refrain from anti-business and anti-industry moves

KARACHI: Another mini-budget or imposition of additional taxes to overcome the yawning deficit would be greatly detrimental to the economy, said Karachi Chamber of Commerce and Industry Acting President Khurram Shahzad.

Industries and businesses are already underperforming due to the imposition of exorbitant taxes and they would be unable to sustain the impact of any additional taxes, he remarked in a statement issued Friday.

“The business and industrial community is not in a position to bear any more shocks as this would lead to the closure of many businesses and massive unemployment,” he said.

The government must strictly refrain from such anti-business and anti-industry moves, he advised.

In reference to a forthcoming visit of the International Monetary Fund (IMF) team to discuss fiscal issues with special focus to restrict target of primary deficit within the desired limits, he pointed out that under the IMF conditions, the primary deficit was to be brought down from 1.8% of GDP to 0.6% of GDP in the current fiscal year but instead of declining, the deficit has gone all the way up to 3.6%.

“This means that the government will have to carry out massive adjustments of Rs1,300 billion to reduce primary deficit to 0.6% of GDP, which many experts believe will be done through another mini-budget and would lead to additional taxes being imposed,” he added.

He warned that this decision would plunge the country into further economic crises and the economy may reach a point of no return.

He said that the Federal Board of Revenue (FBR), on one hand, has been claiming that the tax base has improved to 2,561 million taxpayers and the overall growth was also achieved.

However, the State Bank of Pakistan (SBP) has forecasted further economic slowdowns while the International Monetary Fund (IMF) has also expressed deep concerns over worsening fiscal front.

Published in The Express Tribune, September 7^th, 2019.

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