The Overseas Investors Chamber of Commerce and Industry (OICCI) submitted comprehensive “Taxation Proposals” for the upcoming 2017-18 Sindh budget, representing the collective recommendations of foreign investors. OICCI proposals are focused on accelerating economic growth and FDI inflow in the province and the country.
Commenting on the OICCI Sindh Province Taxation Proposals, OICCI President Khalid Mansoor said, “OICCI members highly appreciate the action of the Sindh government for reducing the rate of sales tax on services, from 15pc to 13pc, in the last two years”. He added that the OICCI members have noted that despite the reduction, the Sindh government, through the Sindh Revenue Board was able to increase its tax collection on services by 21pc in the first six months of the FY 2016-17, as compared to the corresponding period in 2015-16, highlighting the fact that lower tax rates lead to higher collections”.
OICCI’s specific recommendations for inclusion in 2017–18 Sindh budget include: i) Agricultural income should be taxed on actual, and not notional income, including rent income of absentee landlords. ii) Sales tax rate on services in Sindh should be further reduced from 13pc to 10pc over the next three years for registered entities. iii) Telephone usage sales tax rate of 18pc should be made equivalent to GST rate on services. iv) Services of pharmaceutical industry and exports by registered persons should be zero rated. v) Stamp Duty on purchase orders should be eliminated as it is a tax on ‘instrument’ and not on a transaction.
The OICCI Taxation Proposals for Sindh also include recommendations for a better coordination between all sales tax authorities in Sindh, Punjab, KPK and Balochistan and with FBR, a uniform definition of taxation of services and jurisdiction be agreed to facilitate the tax payers and both life insurance and health insurance, which do not fall within the scope of definition of service, should be permanently included in the list of exempted services as is the case in Punjab. Furthermore, federal and provincial governments should urgently address the issue of jurisdiction of WWF/WPPF and provide clarity to tax payers.
The Overseas Investors Chamber of Commerce and Industry (OICCI), is the collective voice of nearly 200 members, representing nearly all the largest foreign investors in Pakistan, who contribute, annually, over one third of the revenue collections in the country by the federal and provincial revenue authorities and invest over $1.5 billion annually in new capital expenditure. OICCI is the largest chamber in terms of economic contribution and CSR initiatives by its members, which benefit over 20 million underprivileged sections of society.
