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

ACCA Pakistan considers Pakistan's Federal Budget 2011 to be aiming for increasing the tax base by acknowledging the need for rational, fair and equitable taxation. The devolution of certain significant budgetary decisions to provinces last year and with agriculture being a provincial subject, the provincial budgets to be announced shortly would assist in assessment of effective utilisation of the funds. The budgets would also outline provincial education, health, social development priorities for future as well as their willingness to think of out of box revenue raising measures which are extremely essential for socio-economic-entrepreneurial development of the provinces. ACCA suggests that the accountability, transparency and efficient record keeping of funds usage by provinces would benefit from investment in financial reporting, accounting, auditing and financial management skills and knowledge.

With professionalism the theme of public sector reforms around the world, budget acknowledgement of the need for reforms in Pakistan's public sector provides an opportunity for consideration of the need to

seek professional expertise in areas of taxation, auditing, corporate governance, financial reporting and financial management. Similar to last year, the salaries of federal government employees have been

increased. As the perceived outcomes of the salaries increases is improved efficiency, performance and motivation; development and communication of performance measures in annual reports or website

would help taxpayers appreciate the utility of the salary increases and the improvement in services offered to general public. It is of benefit to society, individuals and businesses if there is a clear link between tax take and its pay back benefits.

With the international focus on stakeholder aligned sustainable business model, focused and professional regulations envisaged by the budget should discourage ticking the box approach to regulations and instead focus on simplicity of regulations creating a business culture where probity and openness of business operation and disclosure is rewarded. In context of taxation laws the burden of tax should not fall unfairly on taxpayers who play by the rules and pay their fair share.

In the absence of social welfare schemes for underprivileged population and declining social development funds, poverty alleviation through creating an enterprise friendly taxation and business environment require serious consideration. The translation of the resolve to unleash the potential of youth entrepreneurship in new

creative cities into action is urgently needed given that more than half of our population is under the age of 30 and not all of them are educated or employed. The time taken in the planning and the creation of the creative cities could be utilized by the potential entrepreneurs business management, marketing, social media, accounting, financial management and auditing skills and knowledge building. With water management as a budget priority, tax benefits to water effluent treatment plants and encouragement of carbon credits schemes could have sent a strong message to international buyers and businesses about Pakistan's resolve to environmental stewardship, this may have created a competitive advantage for businesses.

ACCA considers the phasing out of the federal excise duties and the withdrawal of exemptions and concessions as the right step in the direction of simplification of taxation system. The implementation of the resolve to widen the direct tax base by inclusion of a large number of tax payers through strict enforcement is essential for creation of a perceived fair taxation system. Urgently needed enterprise growth would be assisted by increase of tax credit in establishment of listed companies and allowance of BMR expenditure as a deduction. For simplification of tax laws, monthly submission of withholding tax statements and mandatory filing of income tax returns and statements where income is between Rs. 300,000 to Rs.350,000 can be dispensed with. ACCA endorses rationalization of sales tax regime by reduction of general sales tax rate to 16%, withdrawal of certain exemptions and streamlining of procedures.

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, how transparently the resources allocated to different expenditures have been utilized. The federal budget maker's vision of a fair rational enterprise taxation system would benefit from more accountability, transparency and probity of the budgetary exercise and utilization of funds as well as effective implementation of the budgetary plans and projections.

ITS TIME TO WORK THE PLAN.