Interview with Mr. Zia ul Mustafa — Chairman, Strategic Board ICMA PakistanÂ
Profile:
Mr Zia ul Mustafa Awan, by qualification is Chartered Management Accountant from ICMA Pakistan and IMA USA. He has more than 25 years of experience in the Corporate and Public sectors in the areas of Strategic Management, Organisational Development, Financial Management, Infrastructure Development, Reforms, Corporate Governance, Team Building and Turnaround in reputable organizations on Leadership positions. Presently, he is leading House of Professionals as President and is a Chairman Strategic Board of ICMA Pakistan.
Earlier he led ICMA as President for three times and also led South Asian Federation of Accountants as Vice President and President of SAFA. In addition to that he also performed as CFO and Business Administrator of Pakistan Expo Centres and served as Member Board of Directors of Zari Taraqiati Bank Ltd, Pakistan Institute of Corporate Governance and Ignite National Technology Find. Apart from having professional experience in the industry, he also enjoys a good reputation as a Corporate Trainer.
Mr Zia ul Mustafa shared his perspective about the Federal Budget 2023-24, which is as follows:
On the whole the budget 2023-24 appears to be reasonable and balanced under the given circumstances, despite missing some vital initiatives that should have been part of this budget.
The budget 2023-24 has few good measures. The budget appears to be a balancing act. Incentives for the agricultural sector are encouraging.
Company reserves have not been taxed which is a relief. Focus on agriculture, especially on seeds and mechanisation is good. There are good incentives in the budget to promote IT and IT-enabled exports.
The reduction in minimum tax on listed companies is a step in the right direction.
However the opportunity of encouraging consolidation and widening the shareholder base by removing double taxation of intercorporate taxes is missing in the budget.
Further, the budget 2023-24 falls short of tackling critical issues like expanding the tax net, investing in education and human development, managing the mounting fiscal deficit, and creating an enabling business environment.
The budget has enhanced the tax burden on the already compliant formal sectors, which will limit capital formation and growth-oriented initiatives in the manufacturing sector.
The budget lacks measures to control fiscal expenditures. In the budget, the government has also announced a dollar amnesty which the IMF doesn’t like.
There is also absence of measures to incentivize investment in manufacturing and other job-creating sectors, while there are no special measures to attract large foreign investment in the country.
The revenue target of PKR9,200 billion not only looks difficult; but, it can have far-reaching negative consequences. Last year’s target was PKR7,500 billion; which is still under failing efforts to be achieved by FBR.
An important point to be noted here us that last year, the economic growth rate was close to 6%; while this year the economic growth rate has dropped a lot to only 0.29%. So, how can more taxes be imposed on very little economic growth performance?
Almost 35% increase in salaries and 17.5% ride in pension of government employees will have snowball effect in the economy. This substantial increase in salaries should have been accompanied by measures to improve productivity and reduction in (the) huge cost of governance in Pakistan.