ISLAMABAD - Prime Minister Nawaz Sharif has announced a multi-pronged incentive package aimed at promoting investment, creating jobs, boosting industrial and business growth, and enhancing tax collection.

Among other things, the comprehensive package promises privileges and exemptions for the highest taxpayers of the country as well as those bringing themselves voluntarily under the tax net.

Addressing business community members here at Prime Minister’s Office on Thursday, Premier Sharif said the special package and other reform measures were part of his government’s efforts to put the country back on the path of progress.

He, on the occasion, also announced to set-up PM Advisory Council on Business and Agriculture to debate and formulate viable policies for these sectors to meet the existing and emerging challenges. The Council, he said, would meet quarterly where government officials and representatives of these sectors would discuss the problems and share ideas to enhance business activity and attract foreign investment to the country.

According to the announced package, to promote investment in industrial undertakings and generate employment, the source of investment shall not be probed by the tax authorities in respect of persons, who set up an industrial undertaking/expansion project on or after January 1, 2014. The priority areas include Green Field Industrial Projects, captive power plants established under such projects, low cost housing construction, livestock, and mining and quarrying in Thar coal, Balochistan and Khyber Pakhtunkhwa. Expansion projects shall also be eligible under this scheme.

However, this facility shall not be available to certain sectors namely arms and ammunition, explosives, fertilisers, sugar, cigarettes, aerated beverages, cement, textile spinning units, flour mills, vegetable, ghee and cooking oil manufacturers, as these sectors are either already have excess capacity or are anti-social. The facility will also not be available to Funds arising from crimes committed under Narcotic Substances Act 1997, Anti Terrorist Act1997 and the Anti money Laundering Act 2010.

In order to promote tax culture and acknowledge leading taxpayers, the prime minister announced that top hundred taxpayers in each category of Companies (CEOs), Association of Persons (main shareholders), salaried individuals and non-salaried individuals will be issued Taxpayer’s Privilege Card. The holders of these cards will be entitled to use VIP Lounge at airports, fast track clearance at immigration counters, issuance of gratis passport, and increase in baggage allowance from $500 to $2,500. Excellence Awards shall be given to top ten taxpayers in each category and they shall be invited to annual dinner with the prime minister at Excellence Award Ceremonies.

With the aim of enhancing income tax collection and simultaneously facilitating the existing taxpayers by providing an option to the taxpayers to avoid tax audit, the PM announced immunity from tax audit for those taxpayers who pay 25 percent more tax for the tax year 2013 than the tax paid or assessed for the previous year. To further facilitate the taxpayers in availing this relaxation, the PM announced extension in the date of filing of returns for the current tax year from November 30 to December 15, 2013. Taxpayers who have already furnished their returns will be eligible to file revised returns to avail the facility.

With the intention to increase the number of return filers, increase tax collection and to reduce the gap between the NTN holders and the return filers, the prime minister announced an incentive to encourage NTN holders who have not filed income tax returns during last five years to file their returns by exempting them from penalty, additional tax and audit if they file their missing returns of the last five years. However, immunity shall be available only if a minimum tax of Rs25,000 on the basis of taxable income has been paid.

In order to broaden the tax base, Premier Nawaz Sharif announced immunity from audit, additional tax and penalty for those individuals who are not in the tax net. To avail this immunity tax on the basis of taxable income should be Rs25,000 or more. Immunity from audit shall be available for tax years for which returns have been filed and for subsequent tax years equal to number of returns filed. Top ten taxpayers in this category will also be provided with Taxpayer’s Privilege Card and will also be entitled to the same privileges as mentioned above.

The provincial governments will be engaged to create ease of doing business by consolidating, rationalising and minimising the licensing, registration and inspection regimes. The recognised trade bodies will be facilitated to avail the facilities associated with setting up of Special Economic Zones by ensuring acquisition of land through provincial governments.

Earlier, during his speech Prime Minister Nawaz Sharif said that he would continue his efforts to keep the dialogue process with Taliban afloat because he believed it is the only way to lasting peace, which is a must for national development. The prime minister said that the country was facing worst sort of terrorism and owing to poor security situation, investors were reluctant even to visit Pakistan and preferred to hold business meetings in Dubai, or in their own country.

He said people from almost all the spheres of life fell victims to the terrorist attacks and keeping in view the volatile situation the country is facing for well over a decade the political leadership across the national spectrum had decided not to do politics on this issue. “The matter was discussed in detail in the All Parties Conference and it was the unanimous view of the national political leadership to look for some negotiated settlement of the issue,” he told. He expressed his optimism that soon the cosmopolitan port city of Karachi would also turn into one of the most peaceful cities of the world, bringing back the economic activities at its boom in the financial hub of Pakistan.

Reiterating his stance of having good relations with immediate neighbours – India and Afghanistan –Sharif said “you can’t change your neighbours so learn to live in peace with them”. The government, he said, wanted to resolve all issues with India through dialogue and he recalled the visit of then Indian prime minister to Pakistan during his previous tenure on his invitation.

During his address, the PM also shed light on the poor economic state of the country. He recalled that in the decades of 50s and 60s the country was progressing well but the wrong policies of nationalisation of private industrial units in 70s served a major blow to the economic growth of the country. In 90s they had again put the country’s economy back on track but all their efforts had been washed away by the military coup in 1998, he added.

Nawaz Sharif regretted that countries like Malaysia and Turkey were lagging behind Pakistan in the past but now these countries have made tremendous progress and their economies are among the fastest growing economies of the world. The basic factor, he said, was the frequent abrogation of the constitution and ousting of the judiciary, and that the country had been witnessing one-man show that lacked consultation and collective wisdom.

He recalled nationalisation of 1972 was a serious setback to the industrial development. “Had that momentum not broken‚ the exports would have touched hundreds of billions of dollars as against the figure of 25 billion we talk about today.”