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Tag: Overseas Investors Chamber of Commerce and Industry

  • Shazad Dada elected as OICCI president

    Shazad Dada elected as OICCI president

    KARACHI: Shazad Dada has been elected as president of Overseas Investors Chamber of Commerce and Industry (OICCI) for the term 2020.

    This was announced at the 160th Annual General Meeting of the OICCI held at the Chamber on Friday, January 31, 2020.

    Haroon Rashid, Managing Director Shell Pakistan Limited, was elected unopposed as the Vice President.

    The other elected members of the OICCI Managing Committee for 2020 are as follows:

    1. SYED ANIS AHMED, ABBOTT LABORATORIES (PAKISTAN) LIMITED

    2. IMRAN AHMAD KHAN, BAYER PAKISTAN (PVT) LIMITED

    3. GHIASUDDIN KHAN, ENGRO CORPORATION LIMITED

    4. IRFAN SIDDIQUI, MEEZAN BANK LIMITED

    5. MAREK ANDZEJ MINKIEWICZ, METRO PAKISTAN (PVT) LTD

    6. ASTUSHI FUJII, MITSUBISHI CORPORATION

    7. SAMER CHEDID, NESTLE PAKISTAN LIMITED

    8. DR. IMRAN RASHEED, NOVARTIS PHARMA (PAKISTAN) LIMITED

    The Incoming OICCI President Shazad Dada in his message to the members said that he strongly believes that Pakistan offers considerable growth potential for existing foreign investors and attractive opportunities for new investors.

    He said his conviction is supported by OICCI members who invested over US$ 13 billion in new capital expenditure in the last seven years.

    He opined that the current dip in the economic cycle of the country will soon revert back to a positive growth trend.

    He lauded the role of OICCI for promoting Pakistan to potential foreign investors during the Chamber’s regular interaction with foreign business and governmental delegations and senior diplomats based in and outside Pakistan.

    Shazad also appreciated the quality of OICCI business climate/perception surveys, the Chamber’s focused and continuing advocacy efforts for streamlining the taxation system, giving practical policy input for increasing the efficiency of energy sector, initiatives on women empowerment and gender equality, the Chamber’s role in improving the security environment, and in taking the Intellectual Property Rights regime in Pakistan to a higher level, which included the publication of a comprehensive IPR manual for the benefit of all innovators and brand owners.

    Shazad Dada is the Chief Executive Officer and member of the Board of Directors of Standard Chartered Bank (Pakistan) Ltd. He graduated with honours from University of Pennsylvania with Bachelors of Science and Bachelors of Arts degrees, and also has an MBA from the Wharton Business School, University of Pennsylvania.
    He is a seasoned banker and a prominent capital markets professional, with over 26 years of diverse experience with renowned financial institutions in the United States and Pakistan.

    Prior to joining Standard Chartered, he was the CEO of Barclays Pakistan. Shazad has also worked at the Deutsche Bank Securities Inc in New York for over 15 years in various capacities before moving back to Pakistan as Managing Director Deutsche Bank AG Pakistan

    Shazad is the Chairman of the Board of Trustee of Developments in Literacy (DIL) Pakistan, member of Board of Directors British Business Centre Pakistan.

    He is also a Council member of Institute of Bankers Pakistan. Shazad was recently recognised as the sixth top Advocate Executive globally by the HERoes Women Role Model Lists 2019 supported by Yahoo Finance for his achievements in promoting gender diversity at workplace.

    He is an avid golfer with a keen interest in a number of other sports.

  • OICCI praises UK for easing travel advisory for Pakistan

    OICCI praises UK for easing travel advisory for Pakistan

    KARACHI: Overseas Investor Chambers of Commerce and Industry (OICCI) has praised the British government for softening travel advisory for Pakistan.

    In a statement issued on Saturday, the chamber said that the advisory would allows tourists, business travelers and British nationals based in Pakistan to travel to various parts of the country.

    While commenting on updated UK travel advisory, OICCI Secretary General, M. Abdul Aleem said: “The upgrade in the UK travel advisory is an appreciation by the UK government of the various initiatives of the government and the security agencies in proactively tackling the security, law and order challenges which had serious repercussions on the image of the country as a safe destination for Foreign Direct Investment (FDI) and it is a clear message to existing and potential foreign investors that there is now no need to factor in security concerns in deciding on foreign direct investment in Pakistan.”

    The new advisory will enable a large number of British nationals to devour the natural beauty of the land as well as the warmth and hospitality of the people across the country, he said, adding that the UK update is consistent with the OICCI 2019 annual security survey, which has been extensively shared with diplomats from UK and other countries, besides senior security and other persons visiting Pakistan from the Head office and Regional offices of leading multinationals operating in Pakistan, who are members of the OICCI.

    The OICCI Security Survey conducted in June 2019, and shared with all stakeholders shows that the foreign investors, perception of the country’s security environment has further improved significantly compared to the already improved security situation recorded in the 2018 survey.

    The annual security survey, conducted among OICCI members only, is one of the critical annual assessment of the operating conditions in Pakistan and is taken very seriously by the potential foreign investors, relevant diplomats and other stakeholders interested in doing business in Pakistan.

    The visibly improved security situation has boosted confidence of foreign investors and is reflected in over 65 percent increase in the visit to Pakistan by OICCI members’ senior HQ/Regional management.

    The increase in visits is a vote of confidence in the improved security environment.

    Aleem concluded that the UK Travel Advisory read together with the OICCI Security survey is a strong indicator that Pakistan as a destination for investors has improved significantly with less concern on overall security situation.

    This improved security environment has allowed many foreign business visitors and trade delegations being granted travel permissions for their visits to Pakistan from their respective embassies and travel security agencies.

    OICCI is the largest chamber of commerce in terms of economic contributions in Pakistan. The 190 OICCI members contribute about a third of the country’s total tax collections, invested $ 2.7 billion last year in new investments and employ about one million people, besides contributing significantly to the socio economic development of the community through their substantive CSR initiatives.

  • Tax system not to improve without documentation of economy: Hafeez Shaikh

    Tax system not to improve without documentation of economy: Hafeez Shaikh

    KARACHI: Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance and Revenue, on Saturday said that taxation system will not be improved without documentation of economy.

    He was addressing at a meeting with office bearers of Overseas Investors’ Chamber of Commerce and Industry (OICCI).

    He said that achieving economic growth was not possible without generating tax revenue. He said trade community should not fear with the condition of Computerized National Identity Card (CNIC) because without documenting the economy tax system would not improve.

    The adviser said that the prime minister was putting all his efforts to facilitate the business community with the realization that trade and business were backbone of the economy.

    Shaikh said that the government had overcome the economic challenges. The government is giving around Rs250 billion subsidy to manufacturers and exporters.

    In order to improve the taxation system of Federal Board of Revenue (FBR) the government is introducing large scale reforms.

    He further said that the government was taken all those steps to strengthen the institutions.

    Hafeez Shaikh said that the IMF had shown confidence on reform programs initiated by the government.

    The government has not borrowed from the State Bank during past four months. Besides the government also reduced the current account deficit, he added.

    He said that in order to facilitate the masses the government had not increased prices of petroleum products.

    The adviser pointed out improvement in stock exchange due to measures of the government regarding confidence building of investors.

  • Overseas investors spend Rs5.5bn for CSR activities

    Overseas investors spend Rs5.5bn for CSR activities

    KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) member companies spent Rs 5.5 billion during 2018-2019 and directly benefited 5.8 million people across Pakistan as part of its Corporate Social Responsibility (CSR) activities.

    As per 2018-19 Corporate Social Responsibility (CSR) Report, which highlights the key social and community related activities of foreign investors operating in the country, member companies continued their efforts for community welfare and collective good the employees.

    There has been growing realization among the businesses that fulfilling social responsibility means doing good business.

    Hence, there has been a widespread engagement of the leading corporates in adopting various forms of social activities depending upon the need of the society in their area of operations.

    The landscape of CSR initiatives and activities is improving rapidly as the corporate sector in the country has been widely adopting the CSR and Sustainability practices and making them permanent feature of the businesses.

    The social areas such as education, human capital development, healthcare, nutrition, environment and infrastructure development are the main focus of the businesses to reach out to the underprivileged sections of the population.

    About 200 leading foreign investors as part of OICCI platform are among other members who besides doing good business, are investing over Rs300 billion annually in expanding their footprint, contributing a lion’s share of the tax revenue of the country, are also rated as the trendsetter and among the prominent social developers of Pakistan through their CSR and sustainable initiatives.

    As a result of untiring CSR activities of 82 OICCI members only during 2018-2019, over Rs5.5 billion were invested on CSR and reached out to around 58 million direct beneficiaries throughout Pakistan.

    OICCI members and their employees spent around 1.2 million man-hours and partnered with 160 social and development sector organizations in fulfilling their unique CSR program.

    The geographic distribution of the CSR activities has been 32 percent in Sindh, 27 percent in Punjab, 15 percent in Khyber Pakhtunkhwa, 10 percent in Balochistan, 8 percent in Azad Kashmir, and 4 percent each in FATA and Gilgit-Baltistan.

    In terms of specific social sector, Human Capital Development and Health and Nutrition remained key focus areas. Human Capital Development initiatives attracted the attention of 90 percent of the members helping to meet the growing need for improving the human development in the country.

    Many of the members have funded new school facilities and made contributions towards vocational training programs for skills development of the youth.

    Moreover, 86 percent of the members actively supported health and nutrition related initiatives through donations to reputable hospitals, medical care camps and health awareness campaigns. Infrastructure Development was also one of the growing areas of interest for 65 percent of the members who assisted communities in the vicinity of their respective major operating facilities.

  • Reforms showing improvement in economy: SBP governor

    Reforms showing improvement in economy: SBP governor

    KARACHI: The reforms to address the macroeconomic challenges faced by the economy are now beginning to bear fruit and improvement in the external sector has become visible, said Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP).

    “Restoring stability will promote investment in the country and thus economic growth,” the SBP governor said during an interactive session with leading foreign investors at the Overseas Investors Chamber of Commerce and Industry (OICCI). Governor was accompanied by the senior leadership of the SBP.

    The SBP governor noted that the bold measures taken in recent past were painful but necessary.

    He elaborated that the average monthly current account deficit, which has been a prime concern for the economy, has halved, export volumes have been growing, non-borrowed foreign exchange reserves have stopped falling and in fact begun to grow, and pressures on inflation are expected to recede from the second half of the current fiscal year.

    President OICCI, Shazia Syed, Vice President OICCI, Shazad G. Dada and Secretary General OICCI, M. Abdul Aleem, highlighted the significant economic contribution of foreign investors at OICCI, who are among the largest economic stakeholders and have invested over $13 billion in the past seven years and continue to have a positive view of the opportunities for investment despite the ongoing challenging economic environment in the country.

    OICCI shared with Dr. Reza Baqir the key highlights of its annual survey on remittances and complimented the Governor that despite extreme pressure on the FX reserves in the past twelve months, the SBP did not delay the remittance of profit, which was appreciated by the foreign investors.

    However, concerns on some other areas were raised and OICCI sought Governor’s support in facilitating different matters in the light of its policies towards improving ease of doing business in Pakistan.

    OICCI members presented a comprehensive list of recommendations to facilitate doing business in Pakistan including proposal for doing away with additional approvals for remittance which are as per registered contract, and proposed that an online portal be established allowing banks to upload the request and supporting documents.

    Dr. Reza Baqir appreciated the contribution of OICCI members to the national exchequer and announced various measures to further streamline the processes for improving ease of doing business.

    “SBP is moving towards digitalization and proactive engagement that will address the major issues systematically,” informed the Governor.

    He promised to consider various OICCI recommendations and agreed on the need for continuous dialogue with the OICCI members inviting the Managing Committee to meet the SBP’s leadership at regular intervals for timely resolution of the issues.

  • Foreign investors’ perception over security environment further improves

    Foreign investors’ perception over security environment further improves

    KARACHI: The foreign investors have expressed satisfaction over improved security environment in Pakistan, according to a report released by Overseas Investors Chamber of Commerce and Industry (OICCI) on Tuesday.

    OICCI’s 2019 annual security survey, conducted in June 2019, shows that the foreign investors, OICCI members’, perception of the country’s security environment has further improved significantly compared to the already improved security situation recorded in the 2018 survey.

    The annual security survey, conducted among OICCI members only, is one of the critical annual assessment of the operating conditions in Pakistan and is taken very seriously by the potential foreign investors, relevant diplomats and other stakeholders interested in doing business in Pakistan.

    Whilst overall responses clearly convey continued improvement in the general security environment, the increase in street crimes, an attack on Chinese Consulate in Karachi, sporadic religious/communal attacks in Baluchistan province and some consequences of the recent spat between India and Pakistan, are also reflected in this survey.

    The 2019 Survey findings re-affirm that security environment all over the country has improved as compared to the already improved situation at the time of the last 2018 survey.

    The improvement in security environment ranges from 40 percent in Baluchistan to over 70 percent in Karachi and Lahore, the two cities where most of the head offices of OICCI members are located.

    The visibly improved security situation has boosted confidence of foreign investors and is reflected in over 65 percent increase in the visit to Pakistan by OICCI members’ senior HQ/Regional management.

    Furthermore most of the Board of Directors and management review meetings are now taking place in the country.

    The increase in visits is a vote of confidence in the improved security environment, although there were also some postponement of visits, mainly due to closure of air space after India Pakistan air encounters in March 2019.

    This is a strong indicator that Pakistan as a destination for investors has improved significantly with less concern on overall security situation. This improved security environment has allowed many foreign business visitors and trade delegations being granted travel permissions for their visits to Pakistan from their respective embassies and travel security agencies.

    Commenting on the survey, the OICCI President Ms. Shazia Syed said that ‘the 2019 Security survey once again depicts that security environment in Pakistan for all key stakeholders, has substantially improved not only for the survey participants, but also for their customers, suppliers and employees”.

    Ms. Shazia further added “Overall, OICCI 2019 Security Survey feedback points to a clear appreciation by the foreign investors of the various initiatives of the government and the security agencies in proactively tackling the security, law and order challenges which had serious repercussions on the image of the country as a safe destination for FDI.”

    The 2019 security survey results in respect of serious crimes like abductions/hostage taking and “Bhatta” demands indicated a massive reduction, led by KPK where 88 percent of respondents have reported a decrease over last year, followed by Lahore with 87 percent and Rest of Punjab/Karachi with 83 percent.

    Even in Quetta and rest of Baluchistan serious crimes are reported to be down by over 60 percent, as compared to last year.

    In respect of petty crimes i.e. mobile, cash snatching and car snatching, also the survey results indicate a downward trend ranging from 92 percent in Islamabad, closely followed by 87 percent in Lahore, 83 percent in Karachi, 82 percent in Peshawar and 66 percent in Quetta.

    More than 300 foreign visitors from OICCI members HQ/Regional offices came to Pakistan during the year. The highest number were from European countries, followed by China,, UK, UAE, US and rest of Asia.

    OICCI is the largest chamber of commerce in terms of economic contributions in Pakistan. The 190 OICCI members contribute about a third of the country’s total tax collections, invested $ 2.7 billion last year in new investments and employ about one million people, besides contributing significantly to the socio economic development of the community through their substantive CSR initiatives.

  • FBR urged to reduce withholding tax for FMCG distributors

    FBR urged to reduce withholding tax for FMCG distributors

    KARACHI: Federal Board of Revenue (FBR) has been urged to reduce withholding tax rate to 0.2 percent for distributors of Fast Moving Consumer Goods (FMCG) companies as higher rate is increasing the cost of doing business.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020, said that the distribution of FMCG is a high turnover and low margin business.

    This fact has also been acknowledged to some extent by the FBR by prescribing minimum taxation rate for the distributors of FMCG Companies at 0.2 percent of their turnover i.e. reducing the basic rate of minimum tax by 80 percent.

    The OICCI suggested that the basic rate of withholding tax under section 153 for distributors of FMCG sector should be reduced to 0.2 percent in line with section 113 of income tax ordinance, 2001.

    Giving rationale, it said that the high rate of withholding tax is increasing the cost of doing business as the existing withholding tax rate is higher than the net margin of distributors.

    Another proposal, the OICCI said that ‘Aerated waters’ is the only item within food and beverage industry that is subject to both sales tax (third schedule of the Sales Tax Act, 1990) and FED (First Schedule of Federal Excise Act, 2005), while all other beverages (like: Juices, Tea & Milk based drinks) are only subject to sales tax at 17 percent.

    Earlier in 2011-2012, FED rate was reduced from 12 percent to 6 percent with commitment that it shall be eliminated in 2 to 3 years but this was not implemented.

    The OICCI recommended that the Federal Excise Duty (FED) should be decreased from 11.5 percent to 8.5 percent, and eliminated gradually.

    The chamber pointed out that after the withdrawal of 58R of Special Procedure Rules, 2007, relating to the payment of Extra Tax on Specified Goods vide SRO 608(I) 2014 dated 02/07/2014, Large Trading Houses are now unable to issue sales Tax Invoice to Customers.

    Resultantly, all Professional Customers are inclined to directly purchase from Manufacturers as they are issuing Sales Tax Invoice to their Customers.

    Therefore, it recommended that Rule 58R which was withdrawn vide SRO 608(I) 2014 be restored only for Large Trading Houses operating as Wholesale-cum-retail under Chapter-XII.

    Giving rationale, it said that it would create level playing field for Large Trading Houses.

    The OICCI also submitted proposal for input Sales Tax on purchase of electrical and gas appliances.

    The Sales Tax Act, 1990 does not permit adjustment of Input Sales Tax on purchase of electrical and gas appliances (including visi-coolers & industrial gas appliances etc.) under section 8(1)(h) of the Act.

    The Act should be amended to allow for adjustment of such input sales tax.
    Visi-Coolers are an integral part of beverage business and inadmissibility of input tax places beverage business at a disadvantage vis-à-vis other businesses, besides such inadmissibility escalates the cost of doing business.

    In other industries, it is reiterated, that all input tax relatable to ‘taxable supplies made or to be made’ is admissible. Removal of restriction shall provide level playing field.

    The OICCI on the issue of further tax on sales to retailers, said with reference to section 14 of the Act, retailers are required to obtain sales tax registration excluding those retailers who are required to pay sales tax through their electricity bill.

    Moreover, as per section 3(1A) further tax at the rate of 3 percent is to be charged where supplies are made to unregistered person other than those mentioned in SRO 648 dated July 9, 2013.

    Therefore it is recommended that retailers who pay their sales tax through electricity bill to be excluded from further tax through inclusion in SRO 648 dated July 9, 2013.

    It will clear the ambiguity regarding applicability of further tax on these retailers.

  • FBR suggested abolishing regulatory duty on import of phrma raw materials

    FBR suggested abolishing regulatory duty on import of phrma raw materials

    KARACHI: Federal Board of Revenue (FBR) has been suggested to abolish regulatory duty and reduce customs duty on import of raw materials by pharmaceutical industry.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020 said that through the Finance Act 2008, custom duty on pharmaceutical raw materials was reduced to five percent.

    However, there are still many items that are not included in the list of duty reduction.

    The OICCI recommended reduction in custom duty and abolishment of regulatory duty on pharma raw materials and packing materials.

    All pharmaceutical raw materials should be added to Table A of Part-II of Fifth Schedule to the Pakistan Customs Tariff, it further recommended.

    The OICCI pointed out another issued saying that as already highlighted in the Supreme Court Human Right Case No. 93336 of 2018, FBR to allow Sales Tax exemption for Goods defined in Medical Devices Rules – 2017 under DRAP Act, 2012 with their respective headings of Customs Act 1969 imported and locally manufactured.

    The OICCI recommended that a new Serial No.4A to be inserted in Part II of the First Schedule to reduce the rate of tax from 5.5 percent to 1 percent on import of pharmaceutical raw materials and finished goods for filers.

    It said that presently the rate of tax at import of pharma raw materials and finished goods is very high considering the price constraints on pharmaceutical products and significant devaluation of currency over past months.

    The pharma sector is highly dependent on import due to non-availability of raw materials and medicine in finished form in as local substitutes.

    The OICCI also suggested sales tax zero rating on pharmaceutical inputs. It said that sales tax being paid on packaging material utilities and other supplies used in manufacturing pharmaceutical products is adding to the product cost.

    Since the final product is exempt from Sales Tax, the tax paid can neither be passed on to the consumer nor can be claimed as input tax. This is also against the philosophy of sales tax which is supposed to be borne by the consumer.

    It recommended that local supply of medicines/drugs should be classified under Zero-rating, instead of the current “exempt” status from levy of sales tax, so that the pharma industry, whose selling prices are regulated by the government, may claim input tax credits on taxable inputs.

    “Alternatively, the taxable raw materials and packing materials, whether imported or locally procured may be notified as exempt from sales tax, if purchased by a pharma manufacturer.”

  • Ban foreign cigarettes without health warnings: OICCI

    Ban foreign cigarettes without health warnings: OICCI

    KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended to the government to impose a ban on the import of cigarettes lacking health warnings, as part of a strategy to deter the rampant smuggling of tobacco products.

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  • Reduction in corporate tax for E&P companies recommended to attract foreign investment

    Reduction in corporate tax for E&P companies recommended to attract foreign investment

    KARACHI: Federal Board of Revenue (FBR) has been recommended to reduce corporate tax rate for exploration and production companies in order attract foreign investment in this sector and generate more revenue for the country.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020 said that the applicable tax rate for the Oil and Gas Exploration and Production sector is 40 percent.

    Before the promulgation of Income Tax Ordinance, 2001, the tax rate was 50 percent to 55 percent, however, the royalty payment to government was adjusted against the tax liability, resulting in effective tax rate of approximately 35 percent or less.

    Applicability of effective 40 percent tax rate has in fact increased the tax expense of the Oil and Gas Exploration and Production Companies, as against the incentives given to other sectors of the economy, whereby the tax rate will be gradually reduced to 30 percent.

    The OICCI recommended that in order to incentivize oil and gas exploration in the country especially after the massive reduction in the international oil prices, the corporate tax rate on E&P sector should be reduced from the current 40 percent to the rate applicable to other corporate sector by making necessary amendments in the Income Tax Ordinance 2001 and Regulation of Mines and Oilfield and Mineral Development (Government Control) Act, 1948.

    Giving rationale, the OICCI said that foreign investment will be encouraged in the country, which will eventually increase the tax collection of the government and will also greatly help to overcome the energy crises in the country.

    The OICCI highlighted another issue of limitation on payment to federal government and taxes, and said that the rate of tax applicable on E&P companies on their Oil & Gas profits are given in their respective PCAs signed with government.

    Under Rule 4AA of Part I of the Fifth Schedule to the Income Tax Ordinance, Super tax has been imposed at 3 percent for E&P companies earning Rs 500million (equivalent to US$ 5million).

    It recommended that it is critical for E&P sector and recommended that the tax applicable should be calculated strictly in accordance with the provisions of the respective PCAs signed between Government and each E&P company and are legally binding, without changes throughout the full Lease period.

    The chamber said that this will remove the negative investment scenario, and potential for litigation – due to the varying interpretations by the FBR from time to time (despite the signed PCAs with Government)

    The OICCI said that tax credits under section 65A and 65B are not currently being allowed to E&P companies by the tax authorities despite the fact that appellate Tribunal decided the matter in favour of E&P companies.

    Therefore, it is suggested that necessary clarification needs to be provided by tax authorities to assessing authorities.

    In view the current energy deficit in the country and recent decision of appellate Tribunal, these credits should be allowed to the E&P companies to promote further investments in this sector.

    Regarding depletion allowance, the OICCI said that clarity over definition of well head value for computation of depletion allowance is required.

    As per clause 3 of Fifth Schedule, depletion is calculated at 15 percent of the gross receipts representing well-head value of production, but not exceeding 50 percent of taxable income.

    E&P industry interprets above by calculating depletion at 15 percent of gross revenue before royalty deduction.

    Tax authorities calculate depletion at 15 percent of Gross Revenue after deduction of royalty.

    Therefore, it is proposed that amendment be introduced in the relevant clause in favor of E&P companies i.e. depletion to be calculated at 15 percent of revenues before royalty deduction.

    The matter is under litigation at High Court level for various E&P companies. Clarification in the definition of Well head value will ease unnecessary burden of these litigations for E&P Companies, the OICCI added.