KARACHI - The Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted comprehensive taxation proposals for the upcoming Sindh Budget 2017-18, representing the collective recommendations of foreign investors.
The 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 15 percent to 13 percent in the last two years”. He said that OICCI members have noted that despite the reduction, the Sindh government through Sindh Revenue Board was able to increase its Tax collection on services by 21 percent in the first six months of the Fiscal Year 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 the upcoming budget included, agricultural income should be taxed on actual and not notional income, including rent income of absentee landlords, Sales tax rate on services in Sindh should be further reduced from 13 percent to 10 percent over the next three years for registered entities, telephone usage sales tax rate of 18 percent should be made equivalent to GST rate on services, services of pharmaceutical industry and exports by registered persons should be zero rated and Stamp Duty on purchase orders should be eliminated as it is a tax on instrument and not on a transaction.
The OICCI taxation proposals also included recommendations for a better coordination between all Sales Tax authorities in Sindh, Punjab, KPK and Baluchistan 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 province. Furthermore federal and provincial governments should urgently address the issue of jurisdiction of WWF/WPPF and provide clarity to tax payers.
The OICCI is the collective voice of nearly 200 members, representing nearly all the largest foreign investors in Pakistan, who contribute over one third of the revenue collections in the country annually by the federal and provincial revenue authorities and invest over $1.5 billion annually in new capital expenditure. The 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.