LAHORE - The Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted comprehensive “Taxation Proposals" for the upcoming Federal Budget 2017-2018 and represented the collective recommendations of foreign investors.
OICCI proposals are focused on accelerating economic growth and FDI inflow in the country. The OICCI had earlier submitted the Key Taxation Proposals on February 9, 2017 to Federal Board of Revenue (FBR). Commenting on the OICCI Taxation Proposals, OICCI President Khalid Mansoor said, “OICCI’s comprehensive proposals are balanced and aim at providing a level playing field to investors, enhance the documentation of the economy, besides recommending certain structural and procedural changes to improve the overall taxation framework in the country.”
The OICCI taxation proposals recommends that the government should introduce such tax policies, which lead to longer term investment plans, and suitably protected to ensure at least 10 year phasing out period so that local and foreign investors could base their plans on policies which are predictable and consistent over a reasonable time. OICCI further recommends that targets given by the FBR hierarchy to the LTUs, should be realistic on research based growth projections in different business sectors. Similarly growth in tax collections, over and above the projected economic growth, should be fully quantified by estimating the contribution from broadening the tax base and bringing new tax payers into the tax net. For this purpose, OICCI recommends formation of a Research and Analysis wing at FBR resourced with High Caliber Professionals and experts to provide sector based Economic and Taxation Projections.
“OICCI has also recommended that the Tax Reform Commission 2016 report be judicially and transparently implemented with periodical monitoring of overall impact on improved Tax Administration, Tax Payee’s morale and motivation besides substantially increasing the number of tax filers, revenue collection and Tax to GDP ratio”, OICCI President Khalid Mansoor said.
OICCI specific recommendations include: Reduction of Corporate Tax rate from 30pc to 25pc and General Sales Tax rate from 17pc to 13pc in line with the rates in Asia region. 3-4 percent super tax to be abolished as well. Rationalise Minimum Tax Regime (MTR) for large value but low margin businesses like oil marketing companies.
Revamping and massive simplification of Withholding Tax Regime from current 55 rates to only 5 rates. Incentives for New Investments in manufacturing and employment generating ventures to be made part of every budget. Group Taxation relief to be re-introduced. Workers Welfare Fund (WWF) & Workers Profit Participation Fund (WPPF) jurisdiction and tax deductibility be clarified, especially after the promulgation of similar legislations in the provinces. Coordination between federal and provincial legislations should be improved as foreign investors have invested in Pakistan and not in any particular province and therefore, should not suffer from inter-governmental issues/conflict. Pending income/sales tax refunds be settled within a month.