Budget 2013-2014: ‘Increase tax net, not current tax rates’

Industrialists give lukewarm response to fiscal plan.

PESHAWAR: While the response of industrialists to the federal budget was lukewarm at best, they did welcome steps to end circular debt and boost employment in the country.

Khyber-Pakhtunkhwa (K-P) Chamber of Commerce and Industry (KPCCI) President Dr Yousaf Sarwar told The Express Tribune the chamber had demanded the federal government in a pre-budget meeting not to levy any new tax or increase any of the current taxes. However, sales tax was still upped from 16% to 17% which will overburden those who are already under the tax net, he complained.

“We recommended the government broaden its tax net rather than introduce new taxes,” Sarawar said, lamenting that that did not happen.



The KPCCI president admitted the government was already in a tough spot and people should understand this. The country was going through difficult times and some difficult  steps would have to be taken, he added.

According to Sarwar, the withdrawal of the Prime Minister Relief Package in Khyber-Pakhtunkhwa and the Federally Administered Tribal Areas (Fata) would not impact the province and its industry as it was amended soon after its introduction, rendering it highly ineffective.

“The focus on the energy crisis and circular debt was a welcome development in every way,” shared Sarwar. “The end of the energy crisis in the country would benefit not just the industrial sector, but day-to-day life.”

Industrialists Association Peshawar President Malik Niaz Ahmad was less pleased, announcing there was nothing positive in the budget as far as K-P was concerned.

However, the decision to connect Gwadar Port to China and Afghanistan was a welcome move, which would create many employment opportunities, said Ahmad. The three-year period of the Prime Minister Relief Package for K-P and Fata (announced in 2010) was already over and its abolition would not impact industries based there, he said while echoing Sarwar’s views.

“They should have announced a special package for militancy-hit K-P, but I think it was the responsibility of the provincial government to convince the federal government, which obviously did not happen,” noted Ahmad.

On the other hand, Tribal Areas Chamber of Commerce and Industry (TCCI) President Rahatullah found the federal government’s decision to withdraw tax relief in Fata and K-P an unfortunate one.

“Let me tell you, we were expecting some encouragement as it’s a matter of survival for the industries in the tribal region; instead, they withdrew tax relief which is more than unfortunate.”

The TCCI president urged the government to solve the energy crisis on a priority basis, saying energy “is a lifeline for industries”.

Published in The Express Tribune, June 13^th, 2013.