PBF Presents Budget Proposals To Relevant Ministries

LAHORE, (UrduPoint / Pakistan Point News - 12th May, 2024) The Pakistan Business Forum (PBF), in its upcoming budget proposals document to relevant ministries, has highlighted the importance of reducing the cost of doing business, improving the agriculture sector, and promoting export-led growth.

The forum has also suggested measures to address the issues of massive under-invoicing by commercial importers and reevaluate the super tax regime.The PBF spokesman disclosed to the media here Sunday that the PBF President Khawaja Mehboob-ur-Rehman forwarded the budget proposals document to Ministries of Finance, National Food Security, Commerce, and Industries for its induction the federal budget 2024-25.

In the document, he added, the PBF President has called for adoption of automation and modern technology to increase productivity and efficiency. He suggests that solid incentives should be included in the budget to encourage businesses and the industry.

Regarding irrigation reforms, the forum said that federal and provincial governments should collaborate for putting in order best irrigation systems and water management practices to minimize water logging and pilferage, and to optimize water usage, besides ensuring use of high-quality seeds and fertilizers to enhance overall agri yield and improving supply chain management to minimize post-harvest losses and enhance market access.

Regarding credit and insurance, it is recommended to expand the availability of credit and insurance services for farmers to manage risks and investments and special directives may be issued to ZTBL and NBP banks in this regard. In terms of research and development, the PBF emphasizes the significance of investing in research and development to boost crop yields, disease resistance, and climate resilience, therefore, a special allocation should be made in the Federal Budget for PARC and NARC with pilot projects for necessary implementation before field trials.

PBF also advocates for enhanced market access and trade agreements to boost agricultural exports and improve the competitiveness of Pakistani agricultural products. PBF underscores the importance of ensuring food security and reducing hunger and malnutrition in Pakistan through effective policies developed with the input of experts. This includes value addition to increase the share of horticulture and agriculture exports.

In this regard, a tax holiday of three years may be considered in the budget for the setup of machinery, including Control Atmosphere (CA) stores.

Similarly in the export sector, the government should simplify and streamline the export process by reducing the number of documents required for export and implementing an online system for submitting documents besides providing incentives for exporters, such as tax breaks and subsidies, to encourage them to export more. Allocation be made for training and capacity-building programs for the new exporters in order to improve their competitiveness through TDAP. Also, in the tax regime, the forum recommends to simplify tax collection system for businesses to comply, especially the newly introduced “Tajir Dost Scheme” for traders, along with rationalizing tax rates and eliminating distortive tax exemptions to create a fair and equitable tax system including automating the tax processes to reduce human interaction and minimize the risk of corruption. Further eliminating withholding taxes to reduce the burden on businesses and individuals included withholding tax on cash withdrawal may be abolished in the upcoming budget.

The PBF also stated that in custom duties, the tariff reduction on raw materials and machinery to zero percent to encourage industrial growth and exports. The removal of additional customs duty (ACD) and regulatory duty (RD) on imported raw materials and machinery and rationalization of customs tariff structure to eliminate anomalies and disparities with the alignment of customs tariff according to international best practices to enhance competitiveness.

Nevertheless, the PBF has put forth certain proposals regarding legislative measures concerning FBR in order to modify sections 25(A) and 25(D) of the Custom Act 1969 ("Act") and grant permission to domestic manufacturers. Likewise, the misuse of the Afghan Transit Trade (ATT) poses a significant problem for formal sector companies, whether they are engaged in manufacturing or imports. Furthermore, the smuggling from Iran is inflicting irreversible damage on both the industry and FBR revenues. In light of this, goods transported under ATT from Pakistan to Afghanistan should be subject to duties and taxes in accordance with Pakistani laws, with the resulting revenue being transferred to the Afghan government.