KARACHI: A senior official of a representative body of foreign investors in Pakistan on Wednesday demanded predictable, transparent and consistent economic policies to strengthen international investment in the country.
The Overseas Investors Chamber of Commerce and Industry (OICCI) represents over 200 members from 35 different countries and operates in 14 different sectors of trade and industry in Pakistan.
Its member companies generated $37 billion in revenue during the last year and paid about $9 billion in taxes. These firms have also invested over $18.5 billion in new capital expenditure since 2012.
“We have submitted comprehensive proposals to the government for the upcoming fiscal budget, 2022-23, to promote business culture, foreign direct investment, ease of doing business and broadening the tax base,” the OICCI secretary general, Abdul Aleem, told journalists in Karachi.
The chamber presented industry specific tax proposals to promote manufacturing and optimize revenue collection in the country.
Aleem said his team also recommended rationalization of the minimum tax regime by immediately reducing it to 0.25 percent for businesses dealing in sectors with high turnover and low margins.
“The members of OICCI have asked for rationalizing the complex withholding tax regime … as it is negatively impacting ease of doing business for all compliant taxpayers, especially in the manufacturing and service sectors,” he said.
The chamber has emphasized reduction of recurring audits, examinations, reviews and recovery proceedings. In one of its recent surveys, its members also showed concern over delayed tax refunds which it suggested should be settled within 45 days while legally allowing inter-adjustment of income and sales tax refunds.
The OICCI has also recommended enhanced use of technology and data mining by leveraging substantial information with the country’s tax collection agency, the federal board of revenue (FBR), in relation to registered and unregistered businesses.
It maintained the FBR should use such information to broaden the tax net, instead of penalizing tax compliant sectors by disallowing their legitimate expenses.
Pakistani and foreign business tycoons and industrialists have long complained about inconsistent economic policies that affect long-term business models and plans.
“Sudden surprises have become a major problem in Pakistan,” the OICCI vice president, Amir Paracha, told journalists, adding: “Such policy shifts affect long term business plans of companies.”
The top chamber officials denied the implementation of their proposals would reduce revenue generation, adding it would have the opposite impact.
They also informed that the OICCI had not asked for any reduction in corporate tax rate, though it had emphasized that no new taxes should be levied during the year until they were to remove some anomalies or end some of the measures introduced through the supplementary budget implemented in the beginning of the year.