On Saturday 28th, the Caretaker Finance Minister Dr Shamshad Akhtar on invitation of the Overseas Investors Chamber of Commerce and Industry (OICCI) visited OICCI. She was accompanied by the Chairman Federal Board of Revenue (FBR) Malik Amjed Zubair Tiwana and custom and income tax commissioner and SECP Commissioner, Warriach.
Her key message was OICCI should support government’s endeavors to encourage foreign direct investment and invest in export based industries to support countries development and contribute to strengthening balance of payments in a sustainable manner.
Dr Akhtar offered her perspectives on recent economic assessment and outlook. First few months data reveals signs of economic recovery. Outlook for agriculture appears promising based on crop output results, large scale manufacturing sector has positive growth though remains low relative to potential. FBR collections in first quarter are good. Bold and quick decisions in exchange market, cost recovery and control of theft etc. are restoring confidence. Minister highlighted the efforts are underway to launch SOE reform policy and compile the latest financial position, while renewing efforts to enhance their corporate governance.
The minister appreciated OICCI members efforts to bring in foreign investments in Pakistan and said that the government is ready to facilitate investors in every way possible. She revealed the key features of the Pakistan’s economic revival program and indicated that its main emphasis is to support sustainable economic recovery through private sector. Pakistan is not the only country in grip of multiple global crises but “The crisis like we are facing at present cannot be addressed solely by the government, private sector’s support is very critical,” she maintained.
During the meeting, the OICCI urged the government to aggressively broaden the tax base to increase revenue. It was further highlighted by OICCI that over Rs300bn of tax evasion in the tobacco sector alone is notable. The Chamber called for setting up an independent private sector group of experts outside the domain of the FBR. A large number of OICCI members representing large foreign investors present in the meeting urged for a level playing field to compliant taxpayers, who already contribute a significant tax revenue and have reinvested $22bn since 2013 in Pakistan. They further complained of tax harassment as collectors have been given unrealistic targets from existing tax payers. It would be prudent to expand the net base to retailers.
The OICCCI presented the findings of its recent survey which recommended the GOP to take measures to stabilize the declining value of the rupee and reducing the overall cost of conducting business in Pakistan – all aimed at making the country a more attractive destination for FDI.
The Minister and FBR chairman also addressed specific concerns raised by OICCI members, which encompassed critical issues such as high tax rates for corporate entities and salaried individuals, tax refunds of MNCs (standing at Rs93bn), revamping and simplification of withholding tax rates, and FBR reforms. In addition pricing and tax distortions were discussed.