Business happy, others not due to govt's unkept promises
Business appears to be happy, others are not because of
Sharif, however, says "the people are in favour of my government's agenda of economic development and raising their living standards. No compromise will be made in implementing this agenda. The new budget will not spur inflation, but will rather boost investment, promote development, and ease people's hardship".
The budget does provide incentives for FDI inflows and domestic investment, cheaper export credit, tax-breaks for industry particularly textiles, slightly reduced corporate taxes, cheaper telephone services, raised government employees salaries and pensions, improved workers' minimum wages, and cuts on tax on tractors and farm machinery.
What makes the masses unhappy? On the reverse side of the coin, the budget raises prices and taxes on electricity, air travel, cigarettes, cooking oil, cement, construction, steel, real estate sales, autos, CNG for autos and taxis, and wedding halls and entertainment.
The government, and its Finance Minister
But the common man wants Sharif-Dar team, to "do more". People demand an end to the rising inflation, high cost of food, and reversing prolonged electricity outages that have shut thousands of factories and made millions jobless.
They want elimination of thousands of terrorists indulging in kidnapping of hundreds of professionals and medical doctors, businessmen and children and demanding millions of Rupee in extortion money. The business and law and order environment has forced dozens of business families to migrate to
The fiscal year 2014-15 budget encompasses a total outlay of
Bulk of the growth is projected to come out of
Dar hopes to foot this huge bill by enhanced tax collection projected at
Terming twin deficits — fiscal and current account — as "major ills of the economy", Dar urged the people to "wait for relief in coming years as a result of a trickle-down effect of the measures being taken by the government to fix the economy".
Tax collection in fiscal year 2013-14 had the target of
Analysts consider the fiscal year 2014-15 tax projections to be "ambitious" keeping in view the fact even the tax-collectors of the
The fiscal year 2014-15 budget is 7.9 per cent bigger in volume, as compared to fiscal year 2014 which was also presented by Dar, days after Sharif's
The FDI inflows will be encouraged in all the sectors. FDI investment in manufacturing industries, housing and construction, the corporate tax has been reduced to 20 per cent , if the investment is made in a new industrial plant or factory or a housing plan to be completed by the end of fiscal year 2017. The government expects the forex reserves to cross
The proposed capital gains tax which was to go up from 10 to 17.5 per cent, has been raised only to 12.5 per cent, on Securities retained for up to 12 months. It will be 10 per cent for Securities retained for one to two years. Overall, the budget reduced the general corporate tax by one percent from 34o to 33 per cent.
The telecom sector will pay 18.5 per cent as Federal Excise Duty, as compared to 19.5 per cent in the past, in order to encourage the spread of telecomm services.
After years of hedging, the government has decided to establish an
The export refinance facility of the State Bank of
The budget encourages export of textiles — which are more than half of the country's overall annual exports. Tax on garments, made-ups and processed fabrics has been reduced between one to four percent. Textile machinery will be importable at the reduced interest rate of nine per cent.
While the government is glorifiscal yearing itself for the budget, the main Opposition in the Parliament is highly critical.
Dar said: "At
"The tangible incentives proposed in the budget are a step towards fiscal consolidation. The incentives proposed in the budget, especially those for the textile sector and new FDI inflows into manufacturing and construction industries are seen by the PICCI as a credible effort by the government to revive economic growth together with ongoing fiscal consolidation," said Asad Jafar, OICCI President.
One can breath a long sigh. But, this is the environment, and the sentiment, with which
Views expressed by the author are his own and do not reflect the newspaper's policy.
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