By Muzammil Aslam
Mini Budget to be announced on Jan 23rd, Finance Minister.
1- Stock market investors will hear good news. We believe, some relief expected in capital gain and dividend taxation. Plus, carry forward losses to 3 years
2- Exports will be focused and tax anomalies/structure would be addressed to provide equal business opportunities to small and large businesses. Previously, tax structure favoured only big corporates
3- The aim of budget to address trade deficit. Clearly, favours import substitution, discourage imports and increase exports. In our view, government would urged the industrialisation, productivity growth and discourage trading in particular import led trading culture
4- Moreover, tax structure will be tweak to increase documentations. Most likely, government will rationalise withholding tax on cash transactions, exempt filer from cash withdrawals withholding tax. Plus, remove restrictions imposed on non-filers to purchase Autos & property transactions and while introducing the alternate mechanism to penalise non-filers
5- Big administrative concessions expected for exporters and import substitutions. Refunds will be settled partially through cash and instruments. The later will be tradable which will give options to exporters to discount the refunds in real time and move forward
Overall, as teasers of mini-budget are flowing, we believe, the mini-budget is targeting to tax efficiently with aim to maximise tax, productivity and investments
The sector likely beneficiary would be banks (documentation), textile (exports), autos & cements (removing restrictions on non-filers)
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