Dr Miftah Ismail, Finance Minister, had a virtual interaction with Overseas Investors Chamber of Commerce and Industry (OICCI) members on July 28, 2022. Ghias Khan, President OICCI, welcomed and thanked the minister for accepting the invitation of the members.

Introducing OICCI, the President informed that OICCI is the collective body of top 200 plus foreign investors operating in Pakistan, who are also the largest contributor to the economy of Pakistan both in terms of tax revenue contribution, as they contribute one third of Pakistan’s taxes, and foreign investment, as they had invested USD 21 billion in last 10 years in Pakistan. OICCI is regarded as the first point of contact of foreign investors in Pakistan.

Ghias Khan then highlighted the issues faced by OICCI members, which included operational issues like pre-approval requirements for import of items falling under HS Code 84 and 85 and difficulties faced by various members for imports, as well as strategic issue of erosion of profits as a result of imposition of super tax and significant depreciation of PKR.

The Minister stated that ECC has decided to lift the ban on all imports except CBUs of autos, mobile phones and home appliances. He further apprised the members that, from this month onward, incoming foreign exchange in terms of exports and remittances will be higher than outgoing foreign exchange through imports. Current account is also expected to be in surplus in the coming months because of calculated policy measures as the results of tough measures taken has started to materialize. This will enable government to end import-curtailing measures by the end of first quarter of current financial year. Dr Miftah Ismail stated further that the long-standing demand of adjustment of margins of petroleum sector will also be adjusted shortly. He also shared his belief that increasing foreign exchange earnings through increasing exports is the way Pakistan can break BOP crisis cycle and underscored the importance of consistent and long-term policies needed in this respect.

During question-and-answer session, members appreciated the decision to lift the ban on imports with the hope that it will help easing the business environment and addressing some of the input shortages. Participants shared the issues being faced by the businesses at present, which include:

• High spread between interbank and real import payment rate.
• Pending adjustment in sales tax paid by pharma industry.
• Delay in approving the Refinery policy, which is hurting FDI in energy sector in Pakistan.
• Ambiguity in the processes and long timelines in the approvals from SBP over the imports of goods, which hampers the ability of the companies to meet the demands and commitments to customers.
• Complexity of tax structure which is deterrent for foreign investors to invest in Pakistan.

Alongside, participants also suggested finance ministers to:

• Form Export Promotion Authority to professionally manage investment in export-based industries.
• Be sensitive to FDI and attract service-based industries especially IT and accounting services.
• Consciously develop regional trade and be part of the regional supply chain.
• Improve investment and productivity of agriculture sector to reduce imports of food items including wheat, cotton and edible oils.
• Implement track and trace system in tobacco and other high revenue sectors urgently to arrest tax evasion and boost tax revenue.

The Finance Minister responded positively to the issues raised, appreciated the suggestions and assured that the government is committed to address the issues being faced by the industries in the best interest of the country.

Abdul Aleem, CE/Secretary General OICCI, stated that OICCI members are keen to help government with their knowledge and experience, especially in attracting FDI to Pakistan but need support from government departments, primarily FBR and BOI, as these department need to be more proactive and accessible to business community. He also highlighted the vacant position of Chairman IPOP, which is a critical matter for the foreign investors. Finance Minister assured that he will ask Chairman FBR to visit OICCI and address their concerns.

Closing the session, Ghias Khan, President OICCI, appreciated the Finance Minister for sparing the time, listening to the issues of foreign investors, and assured him full support from OICCI members in addressing the issues of Pakistan economy.