KARACHI/LAHORE: Businesses on Wednesday hailed the reforms and incentives for trade and industry announced in the Finance Supplementary 2nd Amendment Bill, but economists said a roadmap for key structural economic reforms remained elusive.

Daru Khan Achakzai, president Federation of Pakistan Chambers of Commerce and Industry (FPCCI), appreciated the economic reforms package announced by Finance Minister Asad Umar.

“The package has accommodated the recommendations of the business community,” he said.

Achakzai said a cut in income tax rates for banks’ profits derived from small and medium enterprises, agriculture, and low-cost housing financing would encourage investment and business expansion.

Mohammed Sohail, CEO of Topline Research, said proposals in mini-budget “are attempts to restore lost confidence of business and trade” and the government has managed to give “some relief and incentives to some sector of the economy”.

“But major issues like ballooning current account deficit because of falling exports and devaluation of rupee has not been touched by the government,” Sohail said.

“They didn’t spell how they are going to address such core issues.”

He said mini-budget, like previous interim-budget announced by the PTI government “is unfortunately missing a direction”.

“Probably the IMF (International Monetary Fund) will give them a direction (for key structural reforms) to bring the economy back on track,” he added.

Sohail further said much anticipated mini-budget or economic reform package contained few revenue generating measures and it was more tilted towards giving relief to stock markets, local manufacturers, exporters, SMEs and farmers.

“Though the announced reforms will be positive for local stock market in the short run, lack of measures to address the burgeoning fiscal deficit (6-7 percent of the GDP expected in FY19) will likely limit any upside in medium to long term,” he added.

Arif Habib, chief executive officer of Arif Habib Group, termed the mini-budget ‘very positive’, which was aimed at addressing the core business and economic issues.

“SMEs are the prime generator of employment, and incentivising banks to finance SMEs will bode well for the overall economic growth,” he said, while appreciating the tax holidays for new Greenfield projects. He also hailed removal of super tax on non-banking companies.

Junaid Ismail Makda, president Karachi Chamber of Commerce and Industry (KCCI), welcomed the measures announced by the finance minister, but also said several issues that were presented to the finance minister and commerce advisor by the trade body were not addressed.

“Things that the minister has announced are positive for the business and industry, but we will be able to comment once all the details are shared with us,” Makda said.

Jawaid Bilwani, chairman Pakistan Apparel Forum, called the mini-budget as pro exports and industry.

“Reduction of customs duty on raw material and removal of withholding tax on tax return filers are very positive steps and will facilitate the export-oriented industry,” Bilwani said.

Announcement of issuing promissory notes against stuck refunds of exporters would address the liquidity issues of the export-oriented industry, and will be reflected in exports, Bilwani said.

“The government is taking measures in the right direction, and we hope significant growth in exports going forward.”

Mazhar Ali Nasir, senior vice president FPCCI, hailed the proposal to reduce duties on import of raw materials, and added it would bring cost of doing business down, which was a long-standing demand of the business community.

Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) expressed disappointment on missing an expected relief in the urea price in finance minister’s speech.

A spokesperson of the FMPAC said the issue of the Gas Infrastructure Development Cess (GIDC) settlement was not addressed as proposed by the industry. “Thus, the fertilizer industry has not been able to pass on the impact of GIDC in full, therefore, expected relief in prices of urea may not be as envisaged in the speech,” he added.

Iftikar Ali Malik, senior vice president of SAARC Chamber of Commerce and Industry, appreciated the government for an industry-friendly mini budget.

He said the steps taken by the government will be helpful in industrial revival in Pakistan, besides it would lead to economic activities and growth.

Almas Hyder, president Lahore Chamber of Commerce and Industry, said measures announced in the mini-budget would help improve the ease of doing business as well as bring down the cost.

“Removal of or cut in regulatory duty on 150 items will bring down the cost of doing business and will also discourage smuggling and enhance competitiveness of the industry,” Hyder added.

He said tax exemption facility to the industries in special economic zones was a good step but the same facility should be given to the industrial expansions.