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No major relief has been given to business and industrial community in budget 2020-21

No major relief has been given to business and industrial community in budget 2020-21

Interview with Agha Shahab Ahmed Khan – President, Karachi Chamber of Commerce & Industry


Director Convenience Food Industries (Pvt) Ltd


  • Sectoral Advisory Committee, Environment Climate Change & Coastal Development Department, Government of Sindh
  • Provincial Steering Committee, Services, General Administration & Coordination Department, Government of Sindh
  • Karachi Metropolitan Corporation (KMC)
  • Sindh Solid Waste Management Board, Government of Sindh
  • Industrial Liaison Committee, Industries & Commerce Department, Government of Sindh
  • Coordination Committee, Labor & Human Resources Department, Government of Sindh
  • National Centre for Dispute Resolution (NCDR)
  • NICVD National Institute of Cardiovascular Diseases
  • Federal Tax Ombudsman Secretariat

Member Board of Governors Universities/Educational Institutions:

  • Hamdard University
  • Iqra University
  • Ziauddin University
  • Greenwich University
  • Sir Syed University of Engineering & Technology
  • Institute of Business Administration (IBA)
  • Institute of Business Management (IoBM)
  • PAF Karachi Institute of Economics & Technology (PAF-KIET)
  • Indus University
  • ILMA University
  • Preston University
  • Newports Institute of Communications & Economics
  • DHA Suffa University
  • Commecs Educational Trust
  • National Vocational & Technical Education Commission
  • Khadim Ali Shah Bukhari (KASB) Institute of Information Technology
  • Pakistan Institute of Tourism and Hotel Management
  • Karachi Medical & Dental College
  • Sohail University

Social & business activities:

  • Member of the Board, Sindh Food Authority
  • Former Vice President, Karachi Chamber of Commerce & Industry-2014-15
  • President, Student Union, PECHS Foundation Science College, Karachi
  • Member Executive Committee (FBATTI)
  • Vice Chairman, F.B. Industrial Area (FBATTI)
  • Chairman, Export Committee (FBATTI)
  • Winner – 1st Prize, Pakistan Navy Shooting Range
  • Managing Committee Member, KCCI-2005-07
  • Managing Committee Member, KCCI-2009-11
  • Managing Committee Member, KCCI-2013-15
  • Chairman, Export Sub-Committee, KCCI-2013-14
  • Advisor, Export Sub-Committee, KCCI-2016-19
  • Represented KCCI in Japan and completed short course of the Art of Japanese Manufacturing
  • Member Observer Tri-Pak Project Birmingham Chamber-KCCI

PAGE: What are your views on the Federal Budget?

Agha Shahab Ahmed Khan: The Federal Budget for FY21 is by name a ‘Tax Free Budget’ as no new taxes have been imposed. However, some existing taxes have been increased whereas some have been reduced. No major relief has been given to the business and industrial community, which has been severely-hit by the coronavirus pandemic related economic slowdown. Only few industries like construction and tourism were given relief which is a good thing but the relief could have been extended across the board. The government has also set an ambitious targets of GDP growth, revenue collection, industrial growth and agriculture growth, which would not likely be achieved in the current circumstances as no one knows when the effects of pandemic will ease. How would government collect additional PKR 1,000 billion of taxes through FBR if they had not imposed new taxes, which clearly shows that the burden would be on the existing tax payers rather than increasing the new tax base.

Karachi Chamber of Commerce and Industry (KCCI) was expecting a cut in the rate of Sales Tax, WHT, FED, Custom Duty and Additional Custom Duty across the board for one year during the difficult time but it was so disappointing that the government had not taken this proposal seriously. All the sectors have importance and the government should revisit the budget document to provide incentives and relief to all sectors, as manufacturing is crucial for the employment generation and promotion of domestic economy. In this budget, manufacturing has been neglected. Likewise SMEs have also been neglected badly as they were already surviving hard in acquiring SBP refinance scheme and in the budget they have nothing except tall claims. Wealth creation is not possible without industrialization and transformation of society.


PAGE: Could you tell us about the incentives given to the industry in the Federal Budget?

Agha Shahab Ahmed Khan: The budget FY21 fails to impress the industry as incentives have been given only to selected industries like construction, tourism and some relief to textile. Withdrawal of RD together with custom duty reduction on 40 items being raw materials, mainly pertaining to pharmaceutical, textile, chemicals, etc. New incentives were announced for the real estate sector. No major relief has been given to many important segments of the economy like SMEs, automobile, food and beverage sectors, etc. The budget has no new measures to simplify duties and taxes reclaims or to automate the credit of export rebates upon realization of export proceeds for SME exporters. Reductions in import tariffs and withholding tax on import of plant and machinery need to be appreciated. However, it is disappointing that the budget did not reduce the minimum tax on turnover in view of declining profits.

KCCI feels that this is certainly not a relief budget for industries and businesses and even it is not prepared keeping in view the aftershocks of coronavirus, rising unemployment, low factory output and falling income of people. The last few months under coronavirus have pushed the country back in time in terms of economic development and it might even take years to come out of the economic meltdown. However, the government has not made the Budget FY21 keeping in view current and upcoming challenges. Besides, industries were also expecting some relief in gas and power tariff for bringing down the cost of doing business but the Budget FY21 remained silent on this issue.

PAGE: Were the proposals of the KCCI discussed in the pre-budget sessions and have the recommendations been incorporated?

Agha Shahab Ahmed Khan: The Karachi Chamber of Commerce and Industry carefully examines the economic situation prevailing across all sectors of the economy and drafts proposals after consultations with stakeholders of each sector for the government to consider in the next budget. This process is part of KCCI’s yearly budget exercise and it puts forward a wholesome picture of how the government can help the economy grow by improving the ground realities of each sector. This process was repeated this year as well with proposals submitted to different branches of the government. Like each year, proposals of KCCI were also discussed in various meetings with the government including one with Advisor to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Sheikh in which KCCI was assured that numerous suggestions made by the Chamber had been incorporated in the FY21 Federal Budget. However, the actual budget showed that the government had adopted only a few proposals put forward by KCCI.

PAGE: What needs to be done to facilitate the industry in Karachi?

Agha Shahab Ahmed Khan: The government needs to seriously reconsider the budget and provide relief to the masses. First and foremost, the government needs to re-visit the proposals that different stakeholders had put forward to improve the economic policy environment. The government needs to immediately provide relief in order to reduce the cost of doing business, at least for the time-being. It needs to reduce all taxes by half so that it becomes easier for each and every individual and business to survive in this tough economic time. Furthermore, it needs to subsidize utility costs to ensure that industries as well as other sectors can afford these basic facilities with limited or no income. The government needs to reduce the policy rate to 4% so that businesses find it easier to acquire loans and can even think about infrastructure development for when the economy returns to normal.

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