ISLAMABAD-The Overseas Investors Chamber of Commerce and Industry (OICCI) have noted with concern the contents of the media reported draft Income Tax (Second Amendment) Act 2021.
Secretary General of OICCI, M. Abdul Aleem, in a letter to Federal Minister for Finance and Revenue has expressed concerns over the government’s decision of bringing amendments in Income Tax act. The OICCI, representing the collective view of top 200 foreign investors has always urged the concerned authorities on the need for Predictability, Consistency, and transparency in policies. Abrupt and frequent changes in law damages the confidence of all investors, more so of foreign investors, and changes without proactively engaging with the key stakeholders, like OICCI, should be avoided, he asserted.
He said that the initial impression of the OICCI on the proposed amendments is that, while certain anomalies being rectified through this proposed legislation are most welcome, as they would decrease distortions in the existing tax framework. He stressed that the potential increase in tax collection from withdrawal of exemptions, like, for example, removal of relief on inter-corporate dividends or withdrawing incentives for listing of companies on PSX, would be insignificant, compared to the “confidence damage”. He said that the compliant corporate sector is already taxed heavily, whereas other businesses in the informal economy hardly pay any taxes. If the proposed amendments are approved, the burden on existing taxpayers would further increase, he added.
“We request you to kindly review withdrawal of exemptions being contemplated and restrict the proposed amendments to addressing anomalies and lacunas in the Income Tax laws to avoid sending wrong signals to foreign investors.” he said.