The business community of the South Punjab has expressed dissatisfaction over the federal budget for the next fiscal year 2010-11 and said it is ambigious and unfriendly to business, trade and industry. Terming the federal budget for 2009-10 as manipulation of words and figures, the business community and industrialists have rejected it and lashed out at the federal government for not announcing an industry friendly budget.These were the views of the business community after Finance Advisor Dr Abdul Hafeez Shaikh presented Federal Budget for 2010-11 with a total outlay of Rs 3.259 trillion before the parliament on Saturday.Malik Asrar Ahmed Awan Multan Chamber of Commerce and Industry (MCCI) said that the budget is totally politically benefited statements and is not going to benefit trade and industry.President MCCI said that some steps are good but showing his concerns on the tax revenue that is targeted at Rs 1.78 trillion out of which the Federal Board of Revenue would collect Rs 1.667 trillion, about 9.8 percent of GDP, he said that from where it would be achieved. He said that people were afraid of the new tax system called Value Added Tax (VAT), and the government very smartly changed it to term 'reform GST'. He was of the view that the basically GST and VAT are not different tax systems and the government just changed its name to VAT.He opposed the levy of 0.3 percent withholding tax on the cash transaction, pay order, pay draft and said that it would badly hit the trade and It would be be another shape of turnover tax.President MCCI said "the government should have allocated a huge amount for granting incentives to the industrial sector, farming sector or other productive sectors that generate jobs and capital."MCCI Chief said that most of budget proposals have not been considered as the government has increased withholding tax against our proposals. However, the continuation of zero-rated sector is a good step by the government. He was of the view that continuation of regulatory duty on imports would prove fatal for many industries in the provided environment of doing business.Awan said that the government has increased the Federal Excise Duty on some electronic items including air conditioners and refrigerators, which would decrease their legal import and increase massive smuggling to give huge losses to the government's revenue.In his reaction to the annual budget, Khawaja Muhammad Usman Senior Vice President said apparently government has not announced imposition of any new taxes on food items which may help stabilization in their prices, however previous experiences bears testimony that the possibility of new taxes in the near future cannot be ruled out.He said that levying of 10 to 15 percent federal excise duty on electronic items, including Deep freezer, refrigerators and air conditioners, may affect a substantial section of the population, as these items have become household necessities with the passage of time and their increasing rates would have harmful impact on their daily sales.

Replying to a query, he opined that government had a better alternative of revenue generation by taxing items used by opulent segment of the population, however its choice of taxing electronic items clearly indicates that it has pursued a safer policy - as helpless consumers of electrical appliances can hardly vent their outrage against the arbitrary levying of heavy taxes.President of Tax Bar Association Asad Chaudhry said the budget is dictated by the World Bank and the IMF, and can hardly be called 'people-friendly'.Without expanding the tax base, the government can never generate enough revenue needed to run the country smoothly. It is important to provide extensive subsidies to the poor and downtrodden segment of the population.He added. Traders from Multan, Dera Ghazi Khan and Bahawalpur expressed mixed reactions on Federal 2010-11 budget and termed the budget “a big disappointment” for both trade and industry. The finance minister has failed to come up with any solid plans for the economic revival of the country they said. Khawaja Muhammad Shafiq Chairman of Pakistan Traders Alliance, Khalid Mehmood Qureshi President of Small Traders Alliance,and Malik Nazir Ahmed Awan have also expressed their dissatisfaction with the budget, saying it has brought no visible measures for the revival of the industry and economy and no actions to control the inflation rate, which had surpassed the 12 percent mark.Rana Mehmood-ul-Hassan,MNA and chairman of National Assembly's standing committee on ports and Shipping said the budget was balanced, adding that the government had tried to pull the country out of the financial crisis.He said the government had accepted the PML's stance on the Value Added Tax and had decided to reform the General Sales Tax system from October 2010. He hoped the budget would bring change in the country if all the announced measures were implemented. Financial experts in South Punjab on Sunday termed the 2010-11 budget a “wish list”, saying it lacks all production-oriented objectives as it is centred on deficit-controlling tactics, with the only positive being the relief provided to government employees.Prof .Dr.Shahnawaz Malik of BZU said no major project had been announced to tackle the issues of load shedding and terrorism, the two biggest challenges confronting Pakistan. The one promising feature of the budget is the 50 percent salary increase for government employees, however, only a “lollypop” has been given to the pensioners with a miserly 15 to 20 percent increase, he added. Renowned economist Dr.Karamat Ali termed the commerce minister’s budget speech “a political one”, saying it seemed that the objective of the budget was not to promote production but to manage deficits. He said a small 10 percent cut in the salary of a huge cabinet members was not appropriate. He said the Value Added Tax was not practical for a developing country like Pakistan. He said that former finance minister also vowed to reduce non-development expenditures, but no serious efforts were made to this end.He bitterly criticised the ending of critical subsidy on Atta and, pulses, rice and tea at utility stores. In other words, no more ‘affordable’ basic food items for the needy poor who would line the stores to save every precious rupee. Maybe they were better off as long they had remained forgotten, to quote the minister.According to economic experts, the increase in GST will further fatten the already killing domestic electricity and gas bills. Meanwhile, the government has reduced the income tax collected along with the electricity monthly bill from the industrial and commercial consumers from 10 to five per cent, a move aimed more at benefiting the relatively affluent segment of the society. In another surprise move, the government has also doubled the federal excise duty (FED) on gas from five per cent to 10 per cent. This translates into a Rs10 per MMBTU increase in FED. This too would have an adverse inflationary impact on gas bills across the country, according to economic experts.