ICCI Fears New Wave of Inflation After Mini Budget

ICCI Fears New Wave of Inflation After Mini Budget

The Islamabad Chamber of Commerce and Industry (ICCI) has shown serious concern over the Finance (Supplementary) Bill 2021 tabled in the national assembly on Thursday.

A media release issued by the chamber said that the approval of the bill would hit the growth of many businesses and unleash a new wave of inflation across the country, putting an unbearable burden on the common man and causing a further slump in economic activities.

President Islamabad Chamber of Commerce and Industry Muhammad Shakeel Munir said the business community has been demanding the government to promote ease of doing business and introduce low tax rates to facilitate better growth of business activities that would help in the economic revival of the country.

Contrary to their demands, the government has introduced a mini-budget to withdraw sales tax exemptions worth billions of rupees on industrial machinery, pharma sector and imported food items that would increase the cost of production and further hike inflation.

He said that the mini-budget has proposed to increase the rates of federal excise duty, income tax and sales tax on services in the federal capital territory that would put more burden on the business community and affect business activities. He said the government has also imposed a 17 percent sales tax through min-budget on the mining sector that would increase production cost and affect exports of marble and granite products.

ICCI President said that the Finance (Supplementary) Bill 2021 would raise the prices of many essential items including flour, edible oil, medicines, poultry products, infant food, other food items, mobile phones, personal computers, sewing machines, matchboxes, iodized salt and red chilies.

He added that this would happen at a time when inflationary pressures were already at record levels. He said that the withdrawal of exemptions and imposition of duties on raw materials would have a far-reaching impact on both industry and trade sectors and urged the government to withdraw the mini-budget in the larger economic interest of the country.

Senior Vice President ICCI Jamshaid Akhtar Sheikh and Vice President ICCI Muhammad Faheem Khan in their remarks said that instead of generating additional tax revenue for the government, the mini-budget would promote smuggling and would lead to a negative impact on the local industrial and business activities.

They said with further erosion of their buying power, people would prefer to buy smuggled and cheaper items including mobile phones and this would keep Pakistan a tech backward country, which would be in sharp contrast with the government’s efforts of digitizing the economy. They urged the government to start consultation with the stakeholders to address the key challenges of the economy and withdraw the mini-budget.

Source: Pro Pakistani