The recently unveiled federal budget for the fiscal year 2023-24, presented by Pakistan’s Minister for Finance and Revenue, Ishaq Dar, has sparked a range of reactions from the trading community.
With a total outlay of Rs14.5 trillion, this budget arrives at a critical juncture for Pakistan’s economy, which is currently grappling with financial challenges and awaiting a crucial agreement with the International Monetary Fund (IMF) to secure much-needed funding and avert the risk of default.
As the government finds itself caught between the demands of the IMF’s fiscal adjustment reforms and the need to provide relief to the people ahead of the upcoming national election scheduled for early November, the budget has become a subject of intense scrutiny.
The Karachi Chamber of Commerce, through its President Tariq Yousuf, expressed dissatisfaction with the Budget 2023-24, describing it as “non-friendly” and foreseeing difficulties in its implementation. He highlighted the absence of any mention of a reduction in energy tariffs and expressed skepticism about the government’s ability to achieve the targets set in the budget.
Anjum Nisar, the vice chairman, predicted that the country’s exports would fall short of the $30 billion target, while AK Khalil criticized the government for allocating a mere Rs17 billion for Karachi, emphasizing the city’s neglect in the budgetary allocations.
General Secretary BMG AQ Khalil, President KCCI Tariq Yousuf, Senior Vice President Touseef Ahmed, Vice President Haris Agar and others are also seen in the picture.
— Karachi Chamber of Commerce and Industry (@kcci_official) June 10, 2023
The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) also voiced concerns, stating that no special measures were introduced in the budget and emphasizing the need to provide incentives to the information technology (IT) sector similar to those given to the textile industry. The FPCCI raised questions about the achievability of the tax targets set in the budget, claiming that they burdened existing taxpayers rather than expanding the tax net.
Similarly, the Pakistan Business Forum expressed disappointment, citing the lack of measures to restore business confidence and expressing worries about the increased super tax rate and the imposition of an 18 percent sales tax on essential items. While acknowledging the removal of import duties on agricultural products as a positive step, the forum criticized the imposition of Rs200 billion in new taxes in the face of rising inflation.
However, there were chambers of commerce that welcomed the budget. The Hyderabad and Sialkot chambers described it as a positive move, commending the government for presenting a budget that addresses the country’s financial difficulties.
As Pakistan grapples with economic challenges and seeks to strike a balance between IMF-driven reforms and meeting public expectations, the trading community’s mixed reactions reflect the situation’s complexity. Implementing the federal budget for FY 2023-24 will undoubtedly have far-reaching consequences for Pakistan’s economy and the well-being of its people.