ISLAMABAD: The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to reduce cooperate tax to 25 per cent in the next fiscal year 2018-19.
The president of OICCI Bruno Olierhock while talking to media said that OICCI is the largest chamber of commerce in Pakistan in terms of economic contribution. OICCI members are investing large funds in expanding their footprint in Pakistan and in the past five years have invested about $7.7 billion in net Foreign Direct Investment (FDI).
He said that despite an uncertain business environment due to the upcoming national elections, one of the OICCI members, a major international FMCG alone announced a new investment of $120 million. This is indicative of the potential for large FDI in the growing economy of Pakistan, which Pakistan has to-date failed to fully exploit due to various reasons including weakness in governance and policy implementation.
Talking about the upcoming federal budget 2018-19, he demanded to eliminate the super tax as he stated that the government had imposed this for one year but now it has been extending.
He also said that corporate tax rate should be reduced to 25 per cent as regional countries have 22 per cent of cooperate tax. In addition to this, uniform sales tax rates should be applied all over Pakistan.
He also demanded to introduce new incentive like instance timely resolution of tax matters among provinces and FBR. The minimum tax and alternate tax regime should be abolished, he added. He further said that government implement Tax Reforms Commission Report ona priority basis.
Talking about the FDI, he said that it is no secret that Pakistan is getting less than 1 per cent of its reported GDP in new FDI, including for CPEC investment in recent years. This is well below the norm in the region. There is a need for authorities in Pakistan to understand the factors which have 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.
OICCI has 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 urgently needed for an institutionalised forum to raise investors’ issues at the senior most federal and provincial government level.
The government also needs to immediately resolve the growing number of issues relating to Taxation, tax refunds, circular debt, he added.
Overall, OICCI members believe that the economy is undernourished and deserves many innovative and out of box measures, especially in terms of taxation measures proposed by 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.