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Mixed reactions from businessmen

Pakistani professionals and businessmen in the UAE have criticised their country’s federal budget for 2012-13 due to its inability to address the main economic issues and increasing the number of taxpayers.

They praised the government, though, for providing relief to the common man from the high cost of living by increasing salaries and pensions, as well as reducing taxes and duties.

Muhammad Nafees, a chartered accountant and partner at Sajjad Haider and Company, said that the budget fails to address the three major problems of Pakistan’s economy, such as power shortage, inflation and unemployment.

Overseas Pakistanis have remitted $13 billion, which are keeping the economy afloat. However, no facilities have been offered to them, except this time the finance minister was gracious to appreciate their support, Nafees said.

“An economic growth rate of 3.7 per cent has been projected in the background of 3.5 per cent during the last two years; therefore, no dramatic change is expected to take place during next year, which is also an election year,” he added.

Dr Qaiser Anis, the former president of the Pakistani Business Council Abu Dhabi, has welcomed the lowering of taxes and customs duties, and said these measures will increase revenues and discourage tax theft.

He said there is no new tax imposed in the budget and deductions have been made in taxes and custom duties.

Dr Anis termed the budget as excellent considering the global crisis and lack of cooperation from international community.

He said the proposal to create employment opportunities to 100,000 professionals, cutting down inflation to 9.5 per cent and axing the sales tax from product sales, are welcome measures. He also hailed the lowering of turnover taxes and levies on importers and exporters and raising the limit on withholding tax exemption to Rs5 million.

On the widening budget deficit, he said it would be met through resource mobilisation, the auction of 3G licences and an increase in remittances from overseas Pakistanis.

Dr Hadi Shahid, a chartered accountant and managing partner at Alliott Hadi Shahid, said that the economy had improved considerably in general despite the conditions and disasters faced by the country since 2007. This, he said was possible by controlling black money and hundi transfers of funds as well as increase in remittances by overseas Pakistanis.

Dr Hadi, who is also a founding member of Pakistan Business Council Abu Dhabi, said that the government has provided relief by lowering excise and import duties, increasing the taxable income limit, reducing stock market turnover tax and tax on cash cheques. The increase in salaries, he said, will cover the high cost of living.

He said that the government has failed to introduce a plan to cut inflation as well as a plan to correct the turmoil in the transport sector. The budget lacks tangible plan to address unemployment.

“There is a need to control government expenditure and increase overall development expenditure, channel remittances for development, and develop agriculture and cottage industries,” Dr Hadi said.

Mian Umar Ibrahim, group senior vice-president and managing director at MIH Group Middle East, said that the government has taken steps to bring more people into the tax net, such as a Rs1,000 annual tax on a Rs35,000 monthly salary. It is a positive step to reduce tax on different categories of salary, he said.

“Small businesses should also be brought into the tax circle. All businesses should pay tax. Many want to pay, but corrupt system does not let them. Collection system should be made easy. Even those who can invest in Pakistan do not because the system is not straight,” Umar said.

Pakistan Professionals Wing chairman Munir Mahmood said that the government has announced a deficit budget with very little allocation for education and health.

“This is an alarming sign. We are not happy. A country cannot progress without educating its people,” he said.

Munir said that government administrative expenses should have been reduced, especially those of the president, prime minister, MNAs, ministers and others, since these are non-productive expenses.

He said that only a small relief has been provided in items that are not effective in a common man’s daily life, such as photocopy machines. “Duties and taxes should have should have been reduced on petrol and power,” he said.

Mian Munir Hans,chairman of the Hans World Group of Companies, praised the finance document and termed it good for people due to increase in salaries and house rent.

“This is the best budget under the present circumstances. It will give relief to poor people. Pak businessmen should pay taxes, especially agriculture landlords should also be taxed. Tax payers are few, their number should increase,” Munir said.

business@khaleejtimes.com