National Chamber recognizes the efforts of the Government to signal to all the stakeholders that they are on a path towards managing fiscal space by estimating budget deficit for 2022 in single-digit (8.8%) compared to the estimated double-digit (11.1%) during 2021, however, resorting to, inter-alia, on one-off revenue proposals such as Surcharge Tax of 25% on persons and companies with taxable income over Rs. 2 billion for the year of assessment 2020/21 and increase in VAT on Financial Services by 3% for 2022 and other revenue proposals such as the introduction of Social Security Contribution at 2.5% on turnover and implementation of Special Goods and Services Tax, etc. We further appreciate the government efforts taken to enhance the social safety net which is of paramount importance to sustain the livelihood of lowest income earners of the country through expenditure proposals such as Rural Development Projects, Vari Saubhagya, Development of local government divisions, Rural Livelihood Development, water for all, home shops, home economy, modernization of plantation sector, development of schools, development for rural houses, relief for the micro, small and medium scale entrepreneurs, etc. The National Chamber is hopeful that careful regulatory and policy measures would be introduced to manage the impact of one-off revenue proposals preventing spillover effects to the national economy which may restrict the lending capacity of financial institutions and ability to expand the capacity of large business entities.
“We emphasize the importance of careful administration and meaningful allocation of significant expenditure proposals which are expected to improve living conditions of lower-income earners and improve the SMEs of the country which has attracted special emphasis under the National Chamber Vision. We observe foreign currency scarcity, tangible efforts to improve export orientation and attraction of much needed FDI could have been addressed better in the Budget proposals. Further, we expect efficient monitoring and disbursement of budgetary allocations would help to improve the GDP growth of the country in the medium term allowing the Government to divert the attention to addressing significant challenges such as debt refinancing, enhancing the availability of foreign currency and loosening import restrictions, etc gradually.
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