Pakistan's federal budget for 2024-25 has faced criticism from various stakeholders, including the Pakistan Peoples Party (PPP) and trade bodies, as reported by ANI in Devdiscourse [2649358e]. PPP Chairman Bilawal Bhutto-Zardari expressed dissatisfaction with the lack of consultation by coalition partner Pakistan Muslim League-Nawaz (PML-N) in the budget-making process. The PPP, which supports the Shehbaz Sharif-led government from the outside, blamed the PML-N for making unilateral decisions without consulting its allies. The budget is crucial for Pakistan's economic stability and growth, and the PPP's criticism raises concerns about the government's ability to effectively address the country's economic challenges [2649358e].
In addition to the political tensions, the All Pakistan Newspapers Society (APNS) and Pakistan Broadcasters Association (PBA) have urged Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb to withdraw the proposed amendment regarding the disallowance of sales promotion and advertising costs in the Finance Bill 2024-25. The amendment would mean that sales promotion and advertising expenses, up to 25% of a company’s total, will not be available for adjustment in the income tax return. APNS and PBA argue that this move will discourage future foreign direct investment in Pakistan [c94aef5b].
Now, the American Business Council has joined the chorus of voices urging the Pakistani government to reconsider the removal of the 25% Sales Promotion, Advertising and Publicity (SAP) expense policy, as reported by The Express Tribune [b8588289]. The council, which represents about 60 American companies that have invested billions of dollars in Pakistan, expressed concerns about the removal of the policy. They argue that it will create a significant marketing cost for multinationals, leading to higher tax liability and an anti-competitive landscape. The removal of the policy will force multinational companies to reduce advertising and publicity spending, putting them at a disadvantage compared to local competitors. This will have a negative impact on the advertising and media industry and stifle innovation. Furthermore, the removal of the policy will damage Pakistan's credibility as an investment destination and discourage future investors, particularly global brands entering new markets. The American Business Council held meetings with government officials to express their concerns and highlight the potential negative consequences of removing the policy [b8588289].
The ongoing criticism from various stakeholders, including political parties and trade bodies, highlights the challenges faced by the government in navigating the political tensions and ensuring that the budget reflects the needs and interests of all stakeholders. The government must address these concerns and reconsider the proposed amendments to secure parliamentary approval and meet the requirements of the International Monetary Fund for the bailout package [2649358e] [c94aef5b] [b8588289].