OICCI presents proposals to facilitate FDI

OICCI presents proposals to facilitate FDI

Synopsis

KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted taxation proposals for the upcoming Fiscal Budget 2022/23 highlighting various measures to facilitate business and foreign direct investment (FDI).

OICCI presents proposals to facilitate FDI
Advertisement

The proposals aim at promoting ease of doing business and documentation of the economy besides broadening the tax base and enhancing the revenue collection to match the economic potential of the country.

Commenting on the proposals, OICCI President Ghias Khan said that the tax policies should be predictable, transparent, and consistent.

The policies should be implemented for a longer term to attract large investment including foreign investors in industrial and infra-structure projects, he added.

Considering the economic challenges facing the country post Covid-19 and international cost pressure, the OICCI has not asked for any reduction in the corporate tax rate.

The Chamber emphasised that no new taxes should be levied during the year except removing harsh anomalies and doing away from some of the measures introduced through the supplementary budgetary measures earlier this year.

Advertisement

Besides general tax measures, the OICCI has also recommended industry specific taxation proposals to promote manufacturing and optimise revenue collection in the country.

The chamber has highlighted, as an example, that revenue collection can be increased by as much as Rs70 billion by strict monitoring of massive tax evasion in the tobacco sector.

It recommended that the Minimum Tax regime should be rationalised and immediately reduced to 0.25 per cent for businesses dealing in sectors with high turnover and low margins such as oil marketing, refineries, liquefied natural gas (LNG) terminal operators, large chemical companies, authorised dealers of local vehicle manufacturers, distributors, and traders, including large trading houses.

The OICCI members have asked for rationalising the complex withholding tax regime from 26 to 5 rates, adding that it negatively impacts ease of doing business for all compliant taxpayers especially in the manufacturing and services sectors.

The Overseas Investors Chamber recommended the enhanced use of technology and data mining by leveraging substantial information already made available to the Federal Board of Revenue (FBR) in relation to registered and unregistered businesses.

The board should use such available information for broadening the tax net, instead of penalising tax compliant sector by disallowing their legitimate expenses and input sales tax through measures like those covered in u/s 21(q) of Income Tax Ordinance, 23(1) and 8(1)(h) and (J) of Sales Tax Act.

Advertisement

The OICCI further emphasised on doing away with the undue recurring audit, examinations, reviews and recovery proceedings.

The OICCI members, in a recent survey, have also shown concern on the delayed tax refunds which, it has recommended, be settled within 45 days and inter-adjustment of income and sales tax refunds be allowed in the law.

The Chamber has again recommended Intercorporate Dividends (ICD) in Eligible Group Structures to be reinstated [section 59B], in line with the established global practice of protecting ICDs from multiple taxation, restoration of proviso regarding the incorrect provision of CNIC details by purchaser, and to increase the limit of cost of vehicle for the purpose of depreciation to Rs5 million.

The OICCI members believe the potential of Pakistan can be harnessed with positive and regular engagement of relevant authorities and the private sector.

There is a need to continuously improve and align policies and practices in Pakistan with the best in the region, to be able to attract sizeable FDI in the manufacturing, IT and services export and other job creating sectors.

The OICCI is the collective voice of over 200 members, representing all the largest foreign investors in Pakistan, coming from 35 different countries and operating in 14 different sectors of trade and industry.

Advertisement

Around 30 per cent OICCI member companies are listed on the Pakistan Stock Exchange (PSX) and 50 members are associates of the 2020 Global Fortune 500 companies.

The members of chamber annually contribute over one third of the revenue collections in the country by the federal and provincial revenue authorities and invest over $18.5 billion in new capital expenditure, since 2012.

The OICCI members invested Rs11 billion in various corporate social responsibility (CSR) initiatives, benefiting over 34 million underprivileged sections of society.

Advertisement
Advertisement
Read More News On

Catch all the Business News, Breaking News Event and Latest News Updates on The BOL News


Download The BOL News App to get the Daily News Update & Follow us on Google News.


End of Article

Next Story