But in a release, the chamber said the allocation of G$7.2Bln for national security "is deeply reassuring", as it serves to "alleviate somewhat, the tension and insecurity felt within the business community as a result of incrementing hostile criminal activity."

The chamber said it remains hopeful that the national security issue will be "further dealt with in such a way that it brings about a rapid return to stability and fosters growth and development in the business sector."

As regards tax reform, it observed that the measures instituted with effect from April 1 are designed to deal with tax evasion, the expansion of the tax net and generating increased revenue.

But it said it "remains disappointed" that reform of the corporate income tax structure was not addressed by the budget.

According to the chamber, the corporate tax rate of 45 per cent on commercial companies "is inordinately high by international standards and continues to act as a deterrent to greater investment in the commercial sector."

The personal income tax (P.A.Y.E) also needs to be addressed in such a way that there is an acceptable balance between take-home pay and tax revenue paid to the Government, the organisation suggested.

It noted the increase in the tax-free threshold from $216,000 to $240,000 per annum, recalling that its submissions for the 2002 national budget had recommended a tax threshold of $288,000 per annum.

"It remains to be seen, however, whether the first band of the progressive rate of taxation (20 per cent) will continue to be applied on income between $240,000 and $350,000 rather than $240,000 and $396,000 per annum."

In terms of consumption tax reform, the chamber viewed "with keen interest" the intention to put in place a VAT (Value Added Tax) system by 2006.

It said the present consumption tax regime continues to discriminate against imported consumption goods and is applied at varying rates ranging between 10 and 50 per cent. This results in distortion of pricing and perception of value of consumers throughout the wholesale, re-wholesale and retail pricing channels, the body noted.

It also described the increase in withholding tax as a further disincentive to savings, investment and as yet unrealised bank borrowings, at the same time that it acts as a brake on the economy being able to attract and maintain the skilled and professional class of workers.