Karachi, The Karachi Chamber of Commerce and Industry (KCCI) expressed dissatisfaction with the Federal Budget 2024, critiquing it for not including significant proposals beneficial to trade and industry, and for imposing regulatory burdens that could discourage investment and economic growth.
According to Karachi Chamber of Commerce and Industry, the budget, influenced heavily by the IMF's standard template, failed to accommodate the bulk of proposals from KCCI aimed at boosting economic activity. The chamber was particularly critical of the shift from a turnover-based Final Tax Regime to standard taxation, which it argued could harm export levels. KCCI also noted that removing zero-rating on local supplies under the Export Facilitation Scheme would complicate refund claims with the Federal Board of Revenue, slowing down operations for exporters.
The KCCI pointed out several issues, including a new definition of fraud that extends record-keeping requirements from six to fifteen years, which could potentially expose businesses to bureaucratic harassment. It also highlighted discrepancies in tax rates between salaried and non-salaried individuals, proposing a higher threshold for taxable income to accommodate the rising cost of living due to inflation.
Furthermore, the chamber criticized the broad powers given to FBR officials for investigative audits, which could lead to corruption, and the absence of substantial measures to reduce government expenditure. The budget's reliance on heavy borrowing and the projected consumption of 94.2 percent of federal net revenue for debt servicing were seen as unsustainable, with KCCI urging a reevaluation of these policies.
KCCI also voiced concerns over increased taxation on essential items like milk and medical supplies, which could significantly impact the common man and charitable organizations. The inclusion of Waste and Scrap of Plastics in a tax concession schedule, despite environmental concerns, and the elevated General Sales Tax for Tier-I retailers in sectors already experiencing downturns, were additional points of contention.
In conclusion, KCCI advocated for the government to reconsider the budgetary measures and engage with stakeholders to refine the proposals, ensuring they support rather than hinder Pakistan's business environment and economic prospects.