Financial Times

Biz community apprehensive of people-oriented budget
Businessmen and entrepreneurs fear the forthcoming budget will not be investment and trade-friendly, creating some discomfort for the private sector and hitting corporate profits and the stock market boom. "It will attack the business community and crush their growth," an analyst remarked.

Many said that plans for a luxury tax and share trading tax will beat down the stock market. "Many young entrepreneurs are also planning to migrate since they feel the budget will impede their growth," a stockbroker said, adding many fear the budget will impose a higher corporate taxation.

"This will bring company profits down, affecting the stock market severely," an analyst said. Stockbrokers said the income tax surcharge will increase tax for individuals, weighing down on their disposable income. "Income tax will also bring company profits down."

However, they said government efforts to bridge the deficit are appreciated by many in the business circles, but there is a strong sentiment that taxation is not the answer. "The government should strive to draw on the pledged aid, increase export revenues through enhancing productivity, reduce government spending and broaden the tax net," an analyst said.

Some analysts said the government does not have a choice as they need to collect revenue to fulfil the election pledges. "They are also under pressure to curtail imports and contain the budget deficit and taxation seems a way out," an analyst said.

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