Ahmed Chinoy Chairman of Pakistan Cloth Merchants Association said the Federal Government Aiming for 4-4.5% growth over next three years seems unrealistic because government showed lack of focus on economic priorities in the budget. Therefore it looks that the revenue targets could not be achieved at the time when coronavirus epidemic the whole country is suffering from it as a result, the projection of economic growth reduced from around 3pc to -0.38pc of GDP, while the overall budget deficit is revised upwards from 7.1pc to 9.1pc of GDP. FBR revenue loss was projected at Rs900bn, exports and remittances were adversely affected, and non-tax revenue was decreased. ARTICLE CONTINUES AFTER AD
The GDP growth rate for FY2020-21 has now been targeted at 2.1pc, followed by 4pc in FY2021-22 and 4.5pc in FY2022-23. The finance ministry said it had projected rate of inflation for the outgoing fiscal year at 11-13pc which remained in the same band 11-12pc. The rate of inflation has been targeted at 6.5pc followed by 6.2pc in FY2021-22 and 6pc in FY2022-23. The ministry said the target for total revenue was set at 16.7pc of GDP for the current fiscal year but was missed by a wide margin to 14.3pc of GDP. For next fiscal year, this target is set at 15.9pc of GDP, moving up to 16.6pc in FY2021-22 and 17.3pc in FY2022-23.
Based on this revenue performance, the total tax revenue growth has been targeted at 13.2pc of GDP in FY2020-21, followed by 13.9pc in FY2021-22 and 14.5pc in FY2022-23. The FBR revenue is projected to improve to 10.9pc of GDP next year, followed by 11.8pc in FY2021-22 and 12.6pc in 2022-23. Non-tax revenue is projected to stay almost unchanged at 2.8pc of GDP over the next three years. On the other hand, the finance ministry is targeting to continuously reduce total expenditure in next three fiscal years from current year’s 23.5pc of GDP, mainly because of a declining current expenditure. It said the total expenditure was targeted to come down to 22.9pc next year and then to 22.1pc by FY2022-23. The current expenditure missed the current year’s 20.2pc of GDP target and amounted to 20.9pc. This is again targeted to be contained at 20pc in the upcoming fiscal year and then gradually to 18.8pc of GDP by 2022-23. Development expenditure that stood at 2.6pc of GDP this year is targeted to recover to 2.9pc of GDP next year and then to 3.3pc in FY2022-23.
Ahmed Chinoy said the Government will achieve the target when the demands/proposals of Textile Manufacturing Exporting Sector & SME’s for restoring the zero-rating facility The support / policy for small and medium enterprises introduce the most vulnerable sector under the current crisis. The Sale Tax Rate, Corporate Tax and Turnover Tax Rates must be reduced. The Government fixed a time for deciding appeals as appeals have been pending for decision for the last three years. Turnover tax, Withholding Tax for distributors and Tax for Small and Medium Enterprises must be reduced.
The government provides incentives package to Textile Manufacturing Industry specially SME’s by reducing rate of additional customs duty on exports. Ease of doing business still has room for the improvement, amid pandemic COVID-19.