Sunday, September 25, 2022

Asad Umer to aim Industrialisation while maximising tax revenues on 23rd Jan Mini-Budget


Muzammil Aslam
Muzzammil Aslam has over 15 years of experience in the fields of Economics, Equity Research, Business Development and Financial / Capital markets. Worked as Ex- Chief Executive Officer, EFG Hermes Pakistan Limited. Heading brokerage and inter-bank business and company affairs. He was engaged with KASB Securities Ltd. as Head of Business Development from 2004 to 2009 and with JS Global Capital Ltd. as Head of Business Development and Head of Research from 2009 to 2012. Thereafter, he has been managing his own economic research consultancy firm "Emerging Economics Research". Further, his work on economics has been actively pursued by key government institutions. By qualification, Mr. Aslam holds Bachelor of Commerce and Master of Public Administration Degrees from the University of Karachi, MAS Degree in Economics from Applied Economics Research Centre, University of Karachi and Master of Science Degree in Economics from the University of Bath, United Kingdom. Contact: [email protected]

By Muzammil Aslam

Mini Budget to be announced on Jan 23rd, Finance Minister.

  • Stock market investors will hear good news. We believe, some relief expected in capital gain and dividend taxation. Plus, carry forward losses to 3 years
  • Exports will be focused and tax anomalies/structure would be addressed to provide equal business opportunities to small and large businesses. Previously, tax structure favoured only big corporates
  • The aim of budget to address trade deficit. Clearly, favours import substitution, discourage imports and increase exports. In our view, government would urged the industrialisation, productivity growth and discourage trading in particular import led trading culture
  • Moreover, tax structure will be tweak to increase documentations. Most likely, government will rationalise withholding tax on cash transactions, exempt filer from cash withdrawals withholding tax. Plus, remove restrictions imposed on non-filers to purchase Autos & property transactions and while introducing the alternate mechanism to penalise non-filers
  • Big administrative concessions expected for exporters and import substitutions. Refunds will be settled partially through cash and instruments. The later will be tradable which will give options to exporters to discount the refunds in real time and move forward

Related: Pakistan sails between FATF and IMF smoothly

Overall, as teasers of mini-budget are flowing, we believe, the mini-budget is targeting to tax efficiently with aim to maximise tax, productivity and investments

The sector likely beneficiary would be banks (documentation), textile (exports), autos & cements (removing restrictions on non-filers)

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