Daily Times

ISLAMABAD: Overseas Investment Chamber of Commerce and Industries (OICCI) on Tuesday demanded of the government to reduce the number of taxes, clearance of the tax refund cases as early as possible and for predictable tax policies, removal of Super Tax and 25% Corporate Tax rate to boost FDI.

These views were expressed by OICCI office bearers including its President Bruno Olierhoek, Secretary General Abdul Aleem, Irfan Wahab CEO Telenor Pakistan during a press conference held today.

The claimed that the OICCI members were investing large funds in expanding their footprint in Pakistan and in the past five years had invested about $ 7.7 billion vs $8.6 billion net FDI received during the same period in the country. Last year alone the OICCI members invested over $2 billion in expanding their facilities.

Talking of the incoming federal budget 2018-19, the OICCI has submitted comprehensive taxation proposals to the Federal Board of Revenue (FBR) and provincial revenue authorities.

The proposals were intended to make Pakistan an investment friendly country at par with many of the successful regional countries. The tax recommendations include, eliminating 3-4% super tax as per promise made initially. Reducing corporate tax rate to 25% in line with the regional practice where the rate is 22%.

Uniform Sales tax rates all over Pakistan initially at 13% as in Sindh and then to 10% in line with the average rates in the region. Removing conditions like tax on undistributed profits, tax on bonus shares etc and more incentive on new FDI including to services sector.

They asked for timely resolution of tax matters among provinces and FBR. For example Workers Profits Participation Fund issue is lingering for quite some time. Minimum tax and Alternate Tax regime should be abolished. Re-vamping Withholding tax regime from current 55 rates to just 5.

Taxation policy incentive for investment should be for a longer term, like ten years, so that green field investment with longer time required to develop investment plans are attracted. They also asked for no regulatory duty on Raw materials and implement Tax Reforms Commission report on priority.

Talking of FDI, it was no secret that Pakistan was getting less than 1% of its reported GDP in new FDI, including for CPEC investment in recent years. This was well below the norm in the region. There was a need for authorities in Pakistan to understand the factors which had boosted FDI, and exports, in some of the regional countries like, for example, Vietnam, Indonesia, Thailand and Malaysia so as to adjust policy action to boost FDI inflow in Pakistan. The OICCI had recommended certain visible actions to attract large FDI from across the globe to boost manufacturing, employment and exports for Pakistan. Some of these measures in order of priority are: urgent need for an institutionalized forum for raising the investors issues at the senior most Federal and Provincial Government level. The OICCI had volunteered to structure and manage such a forum.

Proactively manage negative perception of the country through active communication of the progress achieved in various segment of the economy, and the opportunity available for investors in industry, infrastructure and trade.

The Federal, Sindh and Punjab governments to deliver on an action plan to significantly improve on Pakistan’s poor ranking on World Bank’s Ease of Doing Business. Immediately resolve the growing number of issues relating to taxation, tax refunds, circular debt etc.

The lack of seamless coordination among federal and provincial agencies was critical in the area of taxation and setting standards for food and pharma sectors. Need for “Predictable, transparent and consistent policies” and its intended implementation.

Overall, the OICCI members believe that the economy was undernourished and deserves many innovative and out of box measures, especially in terms of taxation measures proposed by the OICCI, to deliver on its potential. The positive demographic profile of Pakistan, together with ongoing investment in CPEC and other infrastructure projects supported by recommended improved public private partnership can lead the country to the next level of economic growth and prosperity. OICCI and its members remain committed to support in this endevour.

Published in Daily Times, April 18^th 2018.