KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) on Thursday expressed its shock and dismay over action taken by the tax authorities against Pakistan’s leading mobile operator.
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Foreign investors express concern over high turnover tax
KARACHI: Foreign investors have expressed concerns over high rate of turnover tax rate, especially for those sectors where margins are very low.
Overseas Investors’ Chamber of Commerce and Industry (OICCI) expressed this concern at an interactive session with Dr. Abdul Hafeez Sheikh held on September 12, 2020, a statement said on Monday.
The statement said that the foreign investors expressed concern on the continuation of the high rate of turnover tax especially for high turnover but low margin sectors like petroleum and chemical businesses.
OICCI members also vented concern on the recent incident on the Lahore-Sialkot ring road which has damaged the morale of the stakeholders, who were otherwise satisfied with the highly improved security environment in Pakistan.
OICCI President Haroon Rashid, welcomed Dr Abdul Hafeez Sheikh and briefed him about the critical role of OICCI and its members in the economy of Pakistan and shared that delays in tax refunds and some other issues are creating hurdles in bringing Foreign Direct Investment (FDI) in the country, as well as not being in sync with the government’s agenda of Ease of Doing Business (EODB).
The participants representing the major foreign investors operating in the country appreciated the GOP’s effort in successfully overcoming the Covid 19 challenge to the economy and taking appropriate measures for the health and safety of the people of Pakistan.
OICCI members complimented the Advisor on Finance for the constructive approach adopted during the 2020-21 Budgeting process where the tariff rationalization of over 1600 items, together with rationalization of withholding taxes at import stage and many other measures contributing towards Ease of Doing Business.
OICCI also appreciated the recent launch of Roshan Digital Account for overseas Pakistanis as a step in the right direction.
Haroon Rasheed recommended that the government should take a collective view of the measures to encourage foreign investment in Pakistan, including appointing a focal ministry for streamlining operating issues of foreign investors.
OICCI strongly recommended that the government should ensure that incentives once given to foreign investors, for example vide Section 65 of the IT Ordinance 2001 in respect of new investments, should not be withdrawn while the respective projects are in implementation phase. OICCI also requested for orderly and prompt settlement of long pending tax refunds and circular debt.
OICCI members were optimistic that the country can attract large FDI by ensuring predictable, consistent and transparent policy framework and its implementation.
The participants also sought Finance Advisor review of the recent announcement that investment in the National Saving scheme will not be available to retirement funds after 2022.
On questions from the audience, Finance Advisor assured that the GIDC issue will be managed amicably in accordance with the Supreme Court decision and that the FBR will be more proactive and will regularly engage with key stakeholders like OICCI members in resolving all legitimate issues especially on tax refunds.
At the meeting Advisor to PM on Finance Dr Abdul Hafeez Sheikh gave a comprehensive overview of the challenges faced by the economy in the past two years and how the GOP has successfully managed to stabilize the economy which is now on a recovery path.
Dr Hafeez Shaikh added that the growth trend in some industries like cement, automobile and fertilizer and rapid growth noticed at PSX are very encouraging and should give confidence to investors.
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Business confidence falls on COVID: OICCI survey
KARACHI: Business confidence survey conducted throughout Pakistan during May – June 2020, were largely influenced by the COVID-19 pandemic which has negatively impacted nearly all the businesses, Overseas Investors’ Chamber of Commerce and Industry (OICCI) said in its latest survey released on Wednesday.
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OICCI members pay one third of total tax collection
KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) said that the foreign investors operating in Pakistan and multinational companies (MNCs) have contributed around 1/3rd of the total tax collection by Federal Board of Revenue (FBR) during fiscal year 2019/2020.
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Foreign investors express satisfaction on security environment
KARACHI: The foreign investors operating in Pakistan have showed satisfaction over security environment especially after quick response of law enforcement agency against failed terror attack on Pakistan Stock Exchange (PSX).
“The smooth and professional handling of the brazen attack on Pakistan Stock Exchange on June 29, and restoring order within a very short time, is a testimony of the OICCI members’ confidence in the ability of the LEAs to professionally combat any threat to life and property in the country, said Haroon Rashid, President Overseas Investors Chamber of Commerce and Industry (OICCI) while commenting on latest findings of security survey,
OICCI is the largest chamber in terms of economic contribution and representing top 200 foreign investors in Pakistan, has released the results of its latest Annual Security survey 2020, covering feedback on the security environment from July 2019 to June 2020.
Overall, the foreign investors have shown high level of satisfaction on the fast improving security environment and have also appreciated the performance of law enforcement agencies (LEAs) in the main business centers of Pakistan, Karachi and Lahore, raising the security satisfaction profile of the two cities and bringing them at par with other megacities in the region.
The OICCI President said: “Foreign investors are not deterred by isolated incidences and continue to take a holistic view of the operating environment, which, OICCI members perceive to be highly positive showing continuous improvement.”
The survey respondents included CEOs and senior management of member organizations, and was participated by 70 per cent of the OICCI’s 200 members, who belong to 35 countries and operate in 14 key sectors of the economy in Pakistan.
It may be noted that over two third of the OICCI members have their head offices in Karachi with operations all over country. The survey was conducted from May 15th till June 22nd.
OICCI 2020 Security Survey indicates that the foreign investors, overall, are impressed with further improvement in the security environment over the past twelve months, since July 2019, especially in Karachi and Lahore, with noticeable improvement in other business centers as well.
While giving assessment of the overall security situation, 60 percent of the respondents have reported improved security environment for own and Customer’s Business, as well as for their respective suppliers and employees.
Irfan Siddiqui, OICCI Vice President pointed out: “this improvement is over and above the already improved security environment last year, and the continuous improvement recorded in the OICCI members annual security surveys since 2015.”
He further added that It is highly encouraging that despite many disruptions during the past twelve months, due to Azadi March in December 2019, border tension with India during Q3 2019, and subsequent travel restriction since end March 2020 due to COVID 19, the visit of foreign nationals visiting Pakistan for OICCI members business, pre COVID 19, showed a healthy increase, as over 40 percent respondents reported more visitors than last year, with 26 percent hosting more than 50 visitors and most respondents getting between 20 and 50 visitors.
The foreign business visitors were mainly from China, UK, USA, UAE, as well as other European and Asian countries.
Due to the sustained improvement of the security environment, OICCI members reported that over 90 percent of the Board and management meetings of their Pakistan business operations, involving HQ and/or Regional Management, were held within the country.
In terms of serious crimes, 87 percent respondents indicated a decrease over last year in Karachi and Lahore. However, the survey respondents have expressed concern on the increasing trend of street crimes.
All in all, 37 percent respondents in Karachi and 27 percent in Lahore reported concern on increasing street crimes.
According to the results Islamabad experienced the lowest increase in street crimes among the key business centers.
There was also a thumbs up for the LEAs as, by and large, the foreign investors were satisfied with the performance of Law Enforcement Agencies, with over 90 percent expressing satisfaction in their interactions with Karachi and Lahore Police, Sindh Rangers, Punjab Police and CPLC and 84% for Sindh Police.
OICCI Security survey is very comprehensive and gives a detailed feedback of a large number of foreign investors operating in Pakistan on various aspect of doing business connected with security and its impact on their operation which is regularly sought by diplomats and security professionals.
Established in 1860, Overseas Investors Chamber of Commerce and Industry (OICCI), is the largest Chamber of Commerce in Pakistan based on economic contribution in the form of taxes and investment by its members and is the collective voice of over top 200 foreign investors in Pakistan, including over 50 Fortune 500 companies, who contribute about one third of the total tax collection in the country and a significant portion of the GDP.
Coming from 35 countries and working in 14 key sectors of the economy, OICCI members are leaders not only in economic activities and investment but are also thought leaders in transfer of technology and in CSR activities.
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Haroon Rashid elected as President OICCI
KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has elected Haroon Rashid as president of the chamber with effect from July 01, 2020.
Haroon Rashid is Chief Executive Officer of Shell Pakistan Limited. His appointment came following a successful tenure of Shazad Dada, who resigned as the President of OICCI after resigning from Standard Chartered Bank and taking over as President of United Bank Limited.
Irfan Siddiqui has been elected as the Vice President of the OICCI from July 1, 2020. Irfan is the founding President/CEO of Meezan Bank Limited.
He initiated the formation of Al-Meezan Investment Bank in 1997, which was converted into a full-fledged scheduled Islamic Commercial Bank in May 2002 – the first ever Islamic Commercial banking license given in Pakistan.
Commenting on his appointment as the President of OICCI, Haroon Rashid was very upbeat and said, “It is really an honor to have been elected as the President of a prestigious organization like the OICCI, which is the largest chamber in the country in terms of economic contribution, contributing over one third of all government levies and is also the largest foreign investor in the country”.
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Foreign investors express concerns on proposed rates for imported raw materials
KARACHI: Foreign investors have raised concerns over the proposed tax rates on import of raw materials.
Overseas Chamber of Commerce and Industry (OICCI), which is represented of foreign investors and multinational companies in Pakistan, highlighted anomalies in the Finance Bill 2020 and proposed rectifications.
The OICCI said that the reduction in rate of income tax u/s 148 to 2 percent on import of raw materials/items mentioned in Part II of the Twelfth Schedule is a significant relief that will improve the cash flow position of companies.
However, two concerns have been voiced on the changes proposed:
a) The Bill seeks to introduce a new Schedule as the Twelfth Schedule to the Ordinance wherein all the goods imported into Pakistan may be classified under either of the three categories viz Part I, Part II and Part III based on PCT code wise listing of goods.
However, certain core raw materials used by manufacturers are still falling under the category of 5.5 percent income tax by virtue of non-inclusion in Part II of Twelfth Schedule.
It is suggested that a general rate of 2 percent may be prescribed for all imports by manufacturing companies for own consumption.
b) The Bill now seeks to omit Clause 72B, therefore, exemption would no longer be available in respect of tax collected under Section 148 of the Ordinance to an industrial undertaking.
Though there is substantial reduction in rate of collection of tax, as a result of withdrawal of such exemption, nevertheless, the taxpayer operating on margins lower than the rate of advance tax collected on imports or having adjustable losses/tax credits or enjoying tax exemption may still face liquidity hitches.
In order to avoid cash flow issues and tax refundable situation, it is suggested that instead of omitting clause 72 B, industrial undertakings importing raw materials for in house consumption should be provided an option.
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OICCI suggests eliminating Sindh infrastructure cess
The Overseas Investors Chamber of Commerce and Industry (OICCI) has made a fervent appeal to the Sindh government, imploring for the withdrawal of the Infrastructure Cess to alleviate the burden on the cost of doing business.
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OICCI lauds SECP for improving regulatory environment
KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has praised Securities and Exchange Commission of Pakistan (SECP) for improving regulatory environment for registered entities.
In a statement on Monday the OICCI felicitated the SECP on the Companies (Amendment) Ordinance, 2020 promulgated on April 30th.
The Chamber, along with other leading business association, has in the past challenged some of the over-regulatory conditions introduced in the Companies Act 2017 without due engagement of the key stakeholders.
The amendments to the Companies Act 2017, according to OICCI members, will further improve the regulatory environment in line with regional practices.
Abdul Aleem, CE/Secretary General of the OICCI commenting on the amendments said: “foreign investors have always supported regulatory environment which are predictable, consistent and transparent.
“The recent April 30th 2020 amendments to Companies Act 2017 had been under discussion between the SECP and other stakeholders, including OICCI during a series of “Consultative session and feedback” meetings held in 2018 and 2019 and acceptance of several recommendation should be a matter of satisfaction for business entities.”
He further said ‘a few recommendations are still not part of the proposed amendments and we shall request SECP to also review these so as to attract sizeable FDI in these challenging, post COVID 19, global investment environment’.
Pakistan’s FDI for past several years has been less than one percent of the GDP against the regional norm of 3 percent and above.
Some of the key amendments in the Act which were challenged by the chamber, which have now been addressed in the amendments include; limiting the scope of the definition of “officer”, allowing a non-listed company to buy back its shares in line with the right already given to listed companies, doing away with the requirement for a ‘foreign national’ to hold National Tax Number as per the provisions of IT Ordinance, 2001, deletion of the clause where a director could be disqualified for a period up to five years if the affairs of the company have purportedly been conducted in a manner which has deprived the shareholders a reasonable return, deletion of the complete section whereby, inter-alia an independent director and a non-executive director were held liable in respect of some acts of omission or commission by a listed or a public sector company, deleting the personal liability of the Directors whereby they were required to make payments under certain circumstances including a situation where the return on the investments was not according to certain criteria, doing away with the impractical provision to deposit any unclaimed or unpaid amount to the credit of the Federal Government, introduction of a ten percent shareholding threshold in the much debated section on Companies’ Global Register of Beneficial Ownership and deletion of the section requiring security clearance before appointment of Directors.
A key matter recommended by OICCI, and other stakeholders, to delete the reference to ‘lineal ascendants and descendants’ from the ambit of related parties has not been addressed and OICCI has again requested SECP to review this important matter.
“Negative perception of Pakistan among potential foreign investors has been a key impediment in attracting sizeable FDI in the country. Pakistan’s rating in the World Bank Ease of Doing Business has only recently improved to 108 from being 147 in 2018 and needs much more business friendly measures to attract its due share of the global/regional FDI, ”Aleem concluded.