The Overseas Investors Chamber of Commerce and Industry (OICCI) has presented a proposal asking for reduction of corporate tax rate from 30pc to 25pc and general sales tax rate from 17pc to 13pc to bring the rates at par with rates in other Asian countries, media sources have reported. The proposals are focused on encouraging economic growth and attracting foreign direct investment (FDI) in the country.
OICCI in its budget proposals for 2017-18, have proposed that tax policy should be aimed at promoting long-term investment with a phasing-out period of at least 10 years so tax policies favor local and foreign investors’ plans.
Moreover, the proposal asks to abolish 3pc to 4pc super tax, and urges the government to rationalise the minimum tax regime (MTR) for large value but low-margin businesses, such as oil-marketing companies also. Furthermore, it also calls for revamping and simplification of withholding tax regime from the current 55 rates to only 5 rates including initiatives to promote investment in manufacturing and employment generating ventures be included in the budget; reintroduction of group taxation relief and clearance of pending income / sales tax refunds within a month should also be introduced.
Moreover, the body also demanded Workers Welfare Fund and Workers Profit Participation Fund jurisdiction and clarification of tax deductibility, especially after the promulgation of similar legislations in the provinces.
“Coordination between the federal and provincial legislations should be improved, as foreign investors have invested in Pakistan and not in any particular province and; therefore, should not suffer from the inter-governmental issues / conflicts,” the OICCI added.
