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Tag: OICCI

  • FBR suggested reducing income tax rate for banks

    FBR suggested reducing income tax rate for banks

    KARACHI: Federal Board of Revenue (FBR) has been advised to reduce income tax rates for banking companies in line with general corporate tax rates.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020, said that the banking sector tax rates have not been reduced in line with the general corporate tax rates.

    Furthermore, Finance Supplementary (Second Amendment) Bill 2019, proposed to again amend the First Schedule to the Income Tax Ordinance 2001, whereby, Super Tax of 4 percent is applicable on banks from tax year 2018 to tax year 2021.

    The banks, in compliance with the prevailing taxation regime have already closed the tax year 2018 (accounting year 2017) and income tax returns have already been duly filed/assessed.

    As a result of the proposed abovementioned retrospective application from tax year 2018 (accounting year 2017), banks would now have to effectively pay super tax for two years or 8 percent instead of 4 percent in tax year 2019 i.e. 4 percent already paid in advance for tax year 2019 along with retrospective charge of 4 percent now being proposed for tax year 2018.

    The OICCI suggested that the tax rates of the banking sector should be aligned with other sectors.

    It is recommended, application of super tax on tax year 2018 should be removed to avoid the double charge of super tax in tax year 2019.

    Furthermore, it is requested that the same overall relief on super tax, granted to other industries, is also provided to the banking sector as well.

  • Additional advance tax proposed on all type of motor vehicles to discourage premium

    Additional advance tax proposed on all type of motor vehicles to discourage premium

    The Overseas Chamber of Commerce and Industry (OICCI), representing foreign investors and multinational companies in Pakistan, has proposed the imposition of an additional advance tax of Rs100,000 on all types of motor vehicles sold before registration.

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  • Exemption on import of telecom equipment demanded to encourage investment

    Exemption on import of telecom equipment demanded to encourage investment

    KARACHI: Foreign and multinational companies have demanded the Federal Board of Revenue (FBR) to exempt sales tax and customs duty on import of telecom equipment in order to encourage investment in this sector.

    The Overseas Chamber of Commerce and Industry (OICCI) in its proposals for budget 2019/2020 said that telecom was very investment intensive sector and it should be given concessions in terms of reduced rates of customs duties and exemption of sales tax against import of telecom equipment.

    The exemption and concessions are important to promote the teledensity throughout the country especially in far flung areas so that the benefits of next generation mobile services can be reached to the masses living in backward areas, said the OICCI – the representative body of foreign investors and multinational companies in Pakistan.

    Previously, telecom sector was importing telecom equipment at 5 percent customs duty and zero percent sales tax under SRO 575, however, through Finance Act, 2015, this SRO was rescinded and consequently, the customs duties on network equipment have been increased from 5 percent to 20 percent and sales tax exemption has been removed.

    “The increase in custom duty and levy of sales tax has badly affected the pace of growth and digital inclusion as the cost of doing business has been significantly increased which is an additional barrier to network coverage in Pakistan,” the OICCI said.

    The roll out of 3G/4G network is still very much at the early stages and reduction in customs duties and restoration of sales tax exemption will help the operators to sustain the necessary investments.

    Therefore, the OICCI recommended to reinstate the concessionary custom duties/ exemption of sales tax (refer SRO 575) to encourage investments in IT/ telecom infrastructure.

  • Elimination of regulatory duty, additional customs duty on essential raw materials recommended

    Elimination of regulatory duty, additional customs duty on essential raw materials recommended

    KARACHI: Federal Board of Revenue (FBR) has been suggested to eliminate additional customs duty and regulatory duty on essential raw materials.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals recommended tariff rationalization in the forthcoming for budget 2019/2020.

    It recommended elimination of additional custom duty and regulatory duty on essential raw materials, which are either not locally available or in limited supply, used for local manufacturing.

    The OICCI – the representative body of foreign investors – also suggested bringing illicit trade into tax ambit.

    It said that on the basis of survey conducted by OICCI amongst its members, losses to the government exchequer due to Illicit trade (business in products which are either smuggled, counterfeit, under-invoiced imports, sold by unregistered manufacturer/seller, etc.) is estimated at Rs200 billion (tobacco alone estimated at Rs63 billion only).

    In order to control the Afghan Transit Trade, it recommended:

    Harmonize duty and tax rates to remove the incentive for evasion.

    Fix quantitative limits for imports based on genuine Afghan needs and size of population.

    Establish a basis of collecting duty/taxes at the point of entry into Pakistan for the account of the Afghanistan Government

    Fix import value in consultation with the brand owner in Pakistan.

    Customs procedures and Cross-border rules should be published for transparency.

    Containers coming back from Afghanistan should be checked by customs.

    There should be a negative list of items which are not utilized in Afghanistan; yet are imported and make their way into Pakistan.

    Streamlining of border crossing procedures on financial guarantee by banks and anti‐corruption measures.

    Export to Afghanistan be facilitated with simplified procedure by FBR and border control authorities.

    For stringent controls illicit trade, it recommended:

    Introduce tighter penalties for illicit trade across categories, including criminal liability across the value chain, including retailers, distributors and manufacturers

    Introduce a special division/ task force to raid retailers and manufacturers to confiscate and destroy illicit stocks

    Launch a media campaign to increase awareness in consumers of the harms of illicit products and discourage them from purchasing such products

    The OICCI suggested structural reforms in the customs:

    Do a thorough review of the custom regime, in consultation with brand owners, to address issues of counterfeiting, smuggling, and rationalization of duty structure and fixing of import Tariff prices.

    Custom valuation should be done on modern lines through online search and matching international and regional pricing and taking local legal importers of items on board.

    IPR (Intellectual Property Rights) laws implementation in Pakistan need to be strengthened. Special IPR tribunals may be formed for speedy trials leading towards IPR compliance at par with international standards of IPR enforceability.

    Unauthorized imports of counterfeit products should be effectively checked through registration of brands with the custom authorities in coordination with the original brand owner/ registered in Pakistan.

    Valuation ruling should be issued in consultation with the owner of the brand or its authorized representative.

    The data of import should be public (restrictively) to ensure transparency and this will also help in taking over of goods under section 25A of the Custom Act, 1969.

    Related Stories

    FBR notifies elimination, reduction of regulatory duties on several raw materials; issues SRO

  • OICCI welcomes Shabbar Zaidi’s appointment as FBR chairman

    OICCI welcomes Shabbar Zaidi’s appointment as FBR chairman

    KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI), has appreciated the appointment of tax expert Shabbar Zaidi as Chairman of the Federal Board of Revenue (FBR), a statement said on Wednesday.

    The OICCI President, Shazia Syed commenting on the appointment said “Shabbar Zaidi, is a well-respected tax professional, who has been closely associated with tax policy and administration in Pakistan for many years.

    The appointment of Shabbar Zaidi as FBR Chairman by the government is very commendable as it will strengthen the FBR capacity substantially.”

    Shazia was confident that “with full support from a well experienced and large FBR team, the new FBR Chairman will be able to lead the needed transformation of the tax culture and significantly boost the tax collection, in line with the true revenue potential of the economy.”

    The OICCI reminded that in the World Bank’s 2019 Ease of Doing Business (EODB) rating, Pakistan was assessed as the 17th worst country in the world on the parameter of ‘paying taxes’.

    The OICCI is hopeful that with a rejuvenated FBR, supported by a close coordination among the provincial tax authorities, and government’s clear direction to improve on EODB, the country will significantly improve its EODB rating.

    The recently concluded IMF–Pakistan staff level agreement also recommends tangible actions to revamp the tax regime and boost the tax to GDP ratio in line with the relevant international standards.

    OICCI members comprising of leading multinationals operating in Pakistan contribute about one third of the total tax collection, the highest by any trade body.

    OICCI has already submitted a series of progressive taxation proposals for the 2019-20 Fiscal Budget to FBR and provincial revenue authorities mainly focusing on facilitating investment and growth in the economy, including need for longer term incentives to boost FDI in the large greenfield and job creating manufacturing facilities, and ensuring implementation of predictable, consistent and transparent policies.

    OICCI has also strongly urged for Revamping of Withholding Tax Regime from current over 50 sub-clauses/provisions to less than ten, with number of tax rates reduced substantially, better coordination between Federal and Provincial Legislations, with policies and tax rates harmonized across all jurisdictions, integration of all revenue authorities in such a way that each Authority remains functional but with one window solution for filing a simplified single return for both Federal and Provincial Taxes.

    OICCI has also shown serious concern on the booming illicit trade with significant damage to revenue base of the economy and urged the authorities to re-visit Afghan Transit Trade agreement supported by structural reforms in Customs to stop the highly visible availability of smuggled foreign FMCG products.

    OICCI has also given workable recommendations, including the use of IT technology, for substantially improving the Documentation of the economy and Broadening of Tax Base, besides reducing the frequency of interaction of the tax officials with the compliant tax payer.

  • 100pc foreign shareholding allowed in legal entities incorporated in Pakistan: Razak Dawood

    100pc foreign shareholding allowed in legal entities incorporated in Pakistan: Razak Dawood

    KARACHI: Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, has said that 100 percent foreign shareholding remained allowed in legal entities incorporated in Pakistan.

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  • Foreign investors’ Pakistan business confidence index decline by 26 percent

    Foreign investors’ Pakistan business confidence index decline by 26 percent

    KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) on Friday released results of its Business Confidence Index (BCI) Survey – Wave 17, which shows that the overall Business Confidence in Pakistan stands at negative 12 percent, a 26 percent decline from the 14 percent positive recorded in the Wave 16 results announced in May last year.

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  • Foreign investors spend over Rs20 billion in CSR activities during 2018

    Foreign investors spend over Rs20 billion in CSR activities during 2018

    Foreign investors who are part of the Overseas Investors Chamber of Commerce and Industry (OICCI) have collectively invested more than Rs. 20 billion under corporate social responsibility (CSR) in Pakistan over the past year, according to Irfan Wahab Khan, President of OICCI.

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