PRE-BUDGET IS ALL ABOUT PLANNING THE WORK AND POST BUDGET IS ABOUT WORKING THE PLAN

PRE-BUDGET IS ALL ABOUT PLANNING THE WORK AND
POST BUDGET IS ABOUT WORKING THE PLAN
PRE-BUDGET IS ALL ABOUT PLANNING THE WORK AND POST
BUDGET IS ABOUT WORKING THE PLAN

14 June 2010 - Pakistan's Federal Budget 2010 aims to introduce
reforms for macroeconomic stabilization, greater provincial financial
autonomy, poverty alleviation and creation of a fair tax system. The
significant increase in the allocation of funds to provinces will
facilitate in alignment of their decisions to the socio-economic needs
of the citizens.
Looking at the budget through the lens of ACCA Pakistan, the challenge
for the provinces will be to create the financial and economic
management capacity to spend the budgeted funds in a manner that
delivers on their socio-economic aims in other words measurable
outcomes that deliver real benefits to the citizens.

A number of economic observers have repeatedly said that throwing more
money into the coffers of provincial governments is only half the job,
the other more important part is accountability and transparency of
its usage, this calls for greater financial resourcefulness, enhanced
financial reporting and management responsibilities. This results in
the need for thorough accounting, auditing and financial management
skills and knowledge enhancement as well as seeking professional
expertise.
As professionalism of public sector becomes an international best
practice, the substantial increase in salaries of federal government
employees may help in addressing challenges of recruiting and
retaining professionals with the right mix of skills and knowledge
thus contributing towards efficiency and performance of the public
sector machinery.

Organisations like the AGP and CGA are already fast-tracking their
capacity building. Programmes like the project for improving financial
reporting and auditing (PIFRA) is already resulting in greater
accuracy and timelier financial reporting to ministries. This is vital
for managing the revenue generation and intelligent spending of
budgets.
ACCA Pakistan considers the CGT (Capital Gains Tax) as a tax that
would contribute to fairer distribution of wealth; ACCA Pakistan
further endorses the phased approach to introduction of CGT. The road
map for CGT provided by the budget allows ample opportunity for the
accounting profession and their clients to factor in the impact of CGT
on their strategies and operations. Businesses should look up to their
tax advisers for better cash management and legitimate schemes to
reduce the burden of CGT.

The current budget appreciates the importance of investment to
business activity. Abolishment of custom duty on selected livestock
categories in line with the ACCA Pakistan budget proposals will boost
high yielding breeds of livestock in Pakistan. Similarly reduction in
filing requirements for withholding agents will lead to simplification
of documentation. However the increase in tax rate for small companies
from 20% to 25% may pose discouraging to enterprise in Pakistan.
Appreciating ACCA Pakistan's pre-budget recommendation to increase
income tax exemption slab for salaried and non-salaried individuals
which shall benefit 780,000 taxpayers approximately, concurrently
increasing their disposable income and stimulating consumption; this
budget envisages a fair tax system based on avoidance of
disproportionate allocation of tax burden.

The proposed system of General Sales Tax aspires to simplify the
taxation system and avoid the incidence of a single tax rate of 15% to
avoid burden on the tax payer. The tax exemption on education requires
reflection. Applying the principle of ability to pay, the education
sector may be classified into private and public sector education
whereby private sector educational institutions may be taxed at 15%.

With majority of Pakistan's population comprising of youth, skills
development especially in the rural areas is a priority. The proposed
scheme whereby unskilled workers in rural areas will be guaranteed
employment for one hundred days is commended. The success of this
scheme lies in carefully considering the training element of the
scheme which should endeavour to develop skills that are highly
practical and employable in the factor market.

A budget document is a planning document which is manifestation of a
government's annual revenue and expenditure expectations. The public
as stakeholders have the right to know how effectively the budgetary
forecasts and expectations have been achieved, and how transparently
the resources allocated have been utilized. The federal budget maker's
vision of a fair taxation system would benefit from more
accountability, transparency and probity of the budgetary exercise and
utilization of funds. ITS TIME TO WORK THE PLAN.
ends

Notes to Editors

1. ACCA is the global body for professional accountants. We aim to
offer business-relevant, first-choice qualifications to people of
application, ability and ambition around the world who seek a
rewarding career in accountancy, finance and management. We have
362,000 students and 131,500 members in 170 countries worldwide.

1. ACCA has worked with governments, national organisations and
development agencies in emerging economies- for over 20 years-
promoting the accounting profession, to create value for the
communities, businesses and individuals it serves.
2. ACCA believes that globalisation of business means that one set
of reporting standards is essential. We favour the principles-based
IFRS.
3. ACCA understands the real issues facing small businesses as
63,000 of our members work in SMEs or small partnerships worldwide.