It is saddening to see that automobile, textile and employee federation representatives have shown their disappointment over the absence of measures to cut the cost of production or create jobs in the Budget 2020-21.
Abdul Waheed Khan, Director General, Pakistan Automotive Manufacturers Association (PAMA) told that in the light of massive downturn, the auto industry was expecting a stimulus package at least in the shape of withdrawal of unnecessary and avoidabsle taxes such as additional customs duty (ACD), additional sales tax (AST), federal excise duty (FED) of 2.5-7.5 per cent depending on engine power and turnover tax.
While the budget had nothing in this regard, he said the government did not even consider the association’s proposals regarding the advance tax under Section 148 or corporate tax or other important measures.
He said the government’s intervention is inevitable to revive the auto industry at this critical juncture when sales have come down by over 50-80pc in various segments during the 11 months of the current fiscal year leading to low revenue collection.
He said the auto industry has suffered due to frequent policy changes and other factors like exchange rate parity, demand collapse and the recent lock down. “The government should have announced a stimulus package in Budget FY21 to revive the auto industry,” he added.
Mashood Ali Khan, Former Chairman, Pakistan Association of Automotive Parts and Accessories Manufacturers, said the budget has nothing for auto manufacturers. The government should have abolished ACD, AST and FED to bring down vehicle prices besides cutting down turnover tax to 0.5pc from the existing 1.5pc.
However, the budget has not provided any relief to the ailing auto sector. He added that manufacturers would face hard times in coming months in absence of any relief from the government and sluggish demand.
Ismail Suttar, President Employers Federation of Pakistan said the budget lacks out-of-the-box solutions to jumpstart the economy, cut down manufacturing costs, create jobs for amid reduction in business orders.
He said the broader policies and incentives such as reduction in utility costs were expected to induce growth in bread-winning industries.
