Any mini budget, additional taxes to prove ruinous for economy: KCCI

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) reacting to rumors and media buzz going on about the announcement of yet another mini budget or imposition of additional taxes to overcome the yawning deficit, warned that any such move would prove ruinous for the economy.

In a statement, acting President KCCI Khurram Shahzad said the industries and businesses, which were already underperforming due to imposition of exorbitant taxes in the budget for current fiscal year, would not sustain the impact of more additional taxes.

Shahzad stated that the business and industrial community was not in a position to bear any more of such shocks which would lead to closure of many businesses and cause massive unemployment which was already on the rise.

Referring to the forthcoming visit of the IMF team next week to discuss fiscal issues with special focus to restrict target of primary deficit within the desired limits, Khurram Shahzad pointed out that under IMF conditions, the primary deficit has to be brought down from 1.8 percent of GDP to 0.6 percent of GDP in the current fiscal year but, instead of declining, the deficit has gone all the way up to 3.6 percent.

“It means that the government will have to carry out massive adjustments of Rs1.3 trillion to reduce primary deficit to 0.6 percent of GDP which many experts believe will be done through another mini budget in which more additional taxes are likely to be imposed but this unwise move would push the country into further economic crises, may be a point of no return”, he added.

He said 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 while on the other, the State Bank of Pakistan (SBP) has forecasted further economic slowdown while the International Monetary Fund (IMF) has also expressed deep concerns over worsening fiscal front, creating a very confusing situation.

“We are totally confused about the ground realities as the statements given by FBR are contradicting what the State Bank and IMF have been forecasting”, he added.

Khurram Shahzad said that the business & industrial community fully respects and appreciates the vision, thinking and resolution of Prime Minister Imran Khan which would certainly transform Pakistan into the most flourishing economy of the region but in order to pull the economy out of crises, the decision makers will have rethink all the strategies and policies which have proved counterproductive so far and instead of showing any signs of improvement, these measures have actually broken the backbone of common man due to across-the-board inflation and also radically enhanced the cost of doing business, resulting in the overall depressed performance of almost all the businesses including Large Scale Manufacturing Units, SMEs and export oriented industries and other businesses.

“We, the business and industrial community of Karachi, are hoping that the PTI government would review all its existing policies and strategies which have failed miserably to provide any relief neither to the business & industrial community nor to common man and they come up with those practical steps in consultation with all the stakeholders which prove favorable for the economy, businesses and the common man”, he added.

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