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Tag: Overseas Investors Chamber of Commerce and Industry

  • German body seeks investment opportunities in Pakistan

    German body seeks investment opportunities in Pakistan

    KARACHI: A 20-member German Emirati Chamber of Commerce & Industry (AHK) business delegation, which is visiting Pakistan for a firsthand assessment of business and investment opportunities in the country held a meeting today with foreign investors, members of Overseas Investors Chamber of Commerce and Industry (OICCI).

    The German Business delegation was accompanied by Holger Ziegeler, German Consul General in Karachi, and First Secretary for Economic Affairs at the German Embassy in Islamabad.

    OICCI CEO/Secretary General M. Abdul Aleem, shared a detailed presentation, highlighting the liberal policies in Pakistan for foreign direct investment (FDI) which offers tremendous opportunities for new investment. Commenting on the investment opportunities in Pakistan, Aleem stated: “OICCI members have benefitted by taking a longer-term view which is illustrated by the fact OICCI members have re-invested over US$ 18 billion in the last 9 years which is more than the total FDI inflow into the country during this period.”

    The OICCI shared with the 20 members of the German Business delegation the results of the recent Business Confidence Index Survey carried out from May to July 2021 showing a dramatic upswing in Business confidence across Pakistan by 59 per cent since the last BCI survey done in the same period in 2020. “The OICCI members randomly included in the survey are more upbeat as their confidence level has gone up by 108’, Aleem added.

    Oliver Oehms, CEO of the visiting German Emirati Joint Council for Industry and Commerce and other members of the delegation enquired about several matters, including potential sectors for investment, special concessions for major investment in Pakistan, incentives relating to Special Economic Zones, major development projects on tourism, the impact of increasing inflation on businesses in Pakistan,  tax incentives for putting up export-based industries using imported raw materials and the most reliable government agency to facilitate the potential foreign investors. All the queries were duly responded by the OICCI members at the meeting.

    Record improvement in foreign investors’ confidence
  • Record improvement in foreign investors’ confidence

    Record improvement in foreign investors’ confidence

    KARACHI: The business confidence score (BSC) of foreign investors operating in Pakistan have witnessed a record improvement.

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  • Self assessment scheme to facilitate taxpayers: Tarin

    Self assessment scheme to facilitate taxpayers: Tarin

    KARACHI: Finance Minister Shaukat Tarin on Friday said that the Universal Self Assessment Scheme (USAS) has been reintroduced. This scheme will facilitate taxpayers in declaring income and assets.

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  • Foreign investors pay Rs1.4 trillion as annual tax revenue in Pakistan

    Foreign investors pay Rs1.4 trillion as annual tax revenue in Pakistan

    KARACHI: The foreign firms operating in Pakistan have paid around Rs1.4 trillion as duty and taxes during fiscal year 2020/2021, said Overseas Investors Chamber of Commerce and Industry (OICCI) on Monday.

    The OICCI is the chamber of leading over 200 foreign investors in Pakistan belonging to 35 countries. It released the consolidated financial contribution of its members for the year 2020 based on feedback from 170 members, 50 of whom are subsidiaries of Fortune 500 companies.

    The foreign investors have contributed significantly towards the GDP of the country and have maintained the OICCI position as the largest chamber of commerce in terms of economic contribution in the country. This comprehensive survey is being conducted annually since 2009.

    Elaborating on the key features of the OICCI 2020 Economic Contribution survey, Irfan Siddiqui, President OICCI highlighted that “we are proud that in the past twelve months, OICCI members, despite very challenging and uncertain business environment due to COVID-19 impact on the business and life of people globally and in Pakistan, contributed over Rs 1.4 trillion, or approximately Rs five billion each working day, towards the tax revenue of Pakistan, approximately one third of the total tax collection in the country.  Two of the OICCI members paid taxes in excess of Rs 100 billion each “.

    Commenting on the significant contribution of foreign investors in the economy of Pakistan, Irfan Siddiqui added “OICCI members believe in Pakistan and going forward are keen for playing a more prominent role in a growing economy supported by a predictable, transparent and stable policy framework and a business friendly regulatory and operating environment”. 

    OICCI members have in the past nine years invested over US $ 18 Billion, largely in the Energy, Telecom, Chemicals, Food /FMCG and Banking sectors. “With an asset base of US $ 137 Billion,” Secretary General, OICCI, M Abdul Aleem added,” OICCI members’ maintained their position as the leading investors in Pakistan during 2020 with new investments of over US $ 2.4 Billion mainly in the Energy, Telecom and Chemicals sectors.”

    Besides the monetary contribution, OICCI members also play a leading role in the transfer of technology, digital transformation, introducing latest inventions and sharing of best practices in the field of manufacturing operation, supply chain and marketing of internationally renowned brands.

    Moreover, OICCI members, as a group, are the largest contributor towards the social sectors. In the last one-year OICCI members contributed Rs 8 billion to social initiatives, benefiting 62 million people throughout the country, and also contributed an additional Rs 8 billion for the various government and private sector COVID-19 containing activities.

    In conclusion, OICCI Secretary General observed that “Pakistan suffers from negative perception which is largely uncalled for, requiring authorities to work in partnership with serious stakeholders, like OICCI, to ensure the country gets its due share of the significant FDI coming to this region.”

  • Foreign investors praise State Bank for facilitating remittances

    Foreign investors praise State Bank for facilitating remittances

    KARACHI: Foreign investors operating in the country have appreciated the significant improvement in the foreign exchange remittance processing time and in growing engagement of the State Bank of Pakistan (SBP) leadership with the key stakeholders.

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  • Foreign investors call for strong protection of intellectual property rights

    Foreign investors call for strong protection of intellectual property rights

    KARACHI: Foreign investors from the platform of Overseas Chamber of Commerce and Industry (OICCI) have demanded strong protection of intellectual property rights in Pakistan for encouraging innovation and creativity in people and society.

     ‘The Overseas Investors Chamber of Commerce and Industry (OICCI) has always championed the cause of protecting Intellectual Property Rights in Pakistan which is critical for attracting and retaining FDI in the country’, commented Irfan Siddiqui President of OICCI on “Intellectual Property Rights Day” celebrated worldwide on April 26th annually.

    Irfan Siddiqui  added that ‘close monitoring of IPR regime in Pakistan has always been a fundamental part of the OICCI agenda.  Laws which give a strong protection to Intellectual Property Rights (IPR) play a key role in encouraging innovation and creativity in people and society’.

    OICCI stated that this year’s World Intellectual Property Rights Day, theme “IP & SMEs: Taking your ideas to market”, will help to highlight the fact that a strong IPR is not only a requirement for multinationals, but a key point for all commercial entities and consumers. Pakistan’s recent accession to the Madrid Protocol has given local businesses, especially exporters, protection of  their Trade Marks in 196 different member countries. There are various indigenous Geographical Indication (GI) products in Pakistan (eg, Peshawari chappals, Ajrak print and Sindhri mangoes). The GI (Registration and Protection) Act 2020 is crucial to secure worldwide recognition of the Pakistani products and has helped establish a system for the registration and protection of GI rights in Pakistan.

    ‘IPR protection motivates innovators, promotes business growth, creating employment, and diversifying the choice of products available to consumers. Strong and effective enforcement of IPR legal framework benefits consumers as they get the feeling of purchasing safe and guaranteed products, especially healthcare products”, commented Erum Shakir, OICCI Managing Committee member and Chairperson of the OICCI IPR Subcommittee

    Sharing the experience and way forward for improving the IPR regime in Pakistan, OICCI members representing the collective voice of top 200 foreign investors in Pakistan, have observed that while the IPR laws in Pakistan are, by and large, world class, its implementation is far from being effective. While appreciating various initiative of the IPR regulator in Pakistan, Intellectual Property Organization of Pakistan (IPO-P) towards facilitating IP protection and rationalizing the associated costs, the registration process for IPR ( copyrights, patents and Trade Marks) needs to be fully digitalized and fast turnaround timing to facilitate all IPR owners, spread all over the country.  This is needed to encourage, new innovators and SMEs to opt for IP Registration. Moreover, a fast track resolution of IP disputes, with enhanced capacity and knowledge sharing on IPR in special courts / tribunals is expected to accelerate new  registration of IPR and build positive image for the country.

    In conclusion, Irfan Siddiqui, OICCI President, observed, “we are proud of OICCI members contribution over the years in raising the awareness about the importance of Intellectual Property Rights in Pakistan for  attracting new FDI, and in promoting innovation and creativity and jobs in the country .  Working in partnership with IPOP and all relevant stakeholders, OICCI is promoting knowledge sharing for a more effective and business friendly IPR regime , so as to encourage innovators in Pakistan and worldwide to share their invention , including latest patents in medicine, in the country.  Without adequate IP protection, local innovators are unable to attract investments, business creation is slow, and jobs lost. Economic prosperity relies on job growth, and strong, effective IP rights have a role to play in creating both”.

  • FBR advised to simplify withholding tax regime on imports

    FBR advised to simplify withholding tax regime on imports

    KARACHI: Federal Board of Revenue (FBR) has been urged to simplify the withholding tax regime on imported goods under Section 148 of the Income Tax Ordinance, 2001.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 urged to FBR to simplify the withholding taxes on goods at the import stage.

    It suggested that the criteria for obtaining exemption under Section 148 of the Income Tax Ordinance, 2001 should be based on discharge of advance tax liability as per section 147 of the Income Tax Ordinance, 2001 and clause 72B of the part 1 of the second schedule should be restored.

    Raw materials imported at the rate of 5.5 percent withholding tax should not be subject to minimum taxation. This anomaly should be clarified by FBR at the earliest.

    Procedure for application of reduced rate of 2 percent on import of raw material for own use which are not covered under Part II of Twelfth Schedule is highly cumbersome and should be simplified.

    Section 148 (1) of the Ordinance to amended via the following insertion:

    “Provided that the Commissioner shall issue exemption certificate/ certificate of non-deduction / collection of advance tax at source at import stage within fifteen days of filing of application to exempt entities upon verification:

    Provided further that the Commissioner shall be deemed to have issued the exemption certificate upon the expiry of fifteen days to the aforesaid company and the certificate shall be automatically processed and issued by Iris”.

  • FBR urged to revise slabs for advance tax collection on motor cars

    FBR urged to revise slabs for advance tax collection on motor cars

    KARACHI: Federal Board of Revenue (FBR) has been urged to revise slabs of engine capacity of motor cars to give benefit to buyers in payment of withholding tax.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 submitted to the FBR, said that advance tax under section 231B of Income Tax Ordinance, 2001 is collected by manufacturers on following categories:

    On engine capacity 1001cc to 1300cc the advance tax is collected at Rs25,000.

    While on engine capacity 1301 cc to 1600cc the advance tax is collected at Rs50,000.

    OICCI recommended that as locally manufactured sedans passenger cars fall slightly above the 1300cc category the slightly higher engine capacity size results in these vehicles falling in higher tax bracket making it more expensive with higher upfront cost to customers.

    Amendment should be made in the categories of vehicles mentioned in Division VII of Part IV of First Schedule as follows:

    On engine capacity 1001cc to 1350cc the advance tax rate should be Rs25,000.

    While on engine capacity 1351 cc to 1600cc the advance tax rate should be Rs50,000.

    In its proposals for auto sector, the OICCI recommended that minimum tax rate should be reduced to 0.2 percent for authorized dealers of local vehicle manufacturers as they have high turnover and low margins.

    The OICCI further said that exempt imports made under SRO 655(I)/2006 & SRO 656(I)/2006 from ACD levied vide SRO 1178 (I) 2015 and enhanced vide SROs 630 (I)/2018 and 670 (I)/2019.

    Federal Excise Duty (FED) on locally manufactured vehicles should be withdrawn.

    Levy of FED on locally manufactured vehicles be withdrawn by deleting the serial no. 55B of Table I of First Schedule to the Federal Excise Act, 2005 as it has resulted in significant increase of sales price of vehicles with consequential reduction in sales volume of the respective vehicle categories.

  • FBR recommended to reduce minimum tax for chemical companies

    FBR recommended to reduce minimum tax for chemical companies

    KARACHI: Federal Board of Revenue (FBR) has been urged to reduce minimum tax rate for chemical companies having large turnover with low profit margins.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 submitted to the FBR, recommended that minimum tax rate should be reduced to 0.2 percent for large chemical companies with large turnover with low profit margins.

    It further recommended that clause b of Section 148(7) of Income Tax Ordinance,  2001 as deleted by the Finance Act, 2017 should be restated, which read as follows: “148(7) b fertilizer by manufacturer of fertilizer” to allow adjustment of tax deducted at import stage for fertilizer imported by a fertilizer manufacturer so as not to make it a final tax.

    It recommended that exemption under Clause 42 read with section 153(3) of the Income Tax Ordinance, 2001 be available to all terminals without discrimination. The said clause be re-worded as follows:

    “(42) The provisions of sub-section 3 of section 153 shall not apply in respect of payments received by a resident person for providing services by way of operation of terminal(s) at a sea-port in Pakistan or of an infrastructure project covered by the Government’s Investment Policy, 1997.”

    For the fertilizer industry, the GST on supply of natural gas as feed stock is at 5 percent and as fuel stock is 17 percent. However, the output GST rate on sales of finished goods i.e. urea is 2 percent. This mismatch between input and output GST results in excessive input tax refundable build-up.

    GST rate on supply of natural gas for fertilizer industry should be zero percent.

    For the sales tax rate on raw material of paints, the OICCI made following recommendations:

    i. Sales tax of 25 percent should be imposed on some basic raw materials like Titanium dioxide and other following categories for commercial importers.

    ii. Enforcement measures to be made more effective in consultation with OICCI members, who are established taxpayers, to penalize tax evaders.

    The OICCI highlighted that macro nutrients being imported under Chapter 31 of Pakistan Customs Tariff, enjoy reduced duties and taxes representing only 8 percent of the value imported whilst in case of micronutrients being imported under Chapter 28, the import duties and taxes are quite high representing 29% of import value.

    It recommended to make necessary amendments in the revenue regulation to reduce sales tax and import duties on import of micronutrients.

  • Normal corporate tax rate for banking sector recommended

    Normal corporate tax rate for banking sector recommended

    KARACHI: Foreign investors have recommended that corporate tax rates for the banking sector should be aligned with other sectors.

    At present the banking sector is paying 35 percent corporate tax rate as compared with 29 percent corporate tax rate for other sectors.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 submitted to the Federal Board of Revenue (FBR) recommended that corporate tax rates for the banking sector should be aligned with other sectors.

    Further super tax relief, as granted to other industries, should be given to banking sector as well.

    Regarding the issue of Tax Deduction on Profit on Debt under section 151 of Income Tax Ordinance, 2001, the OICCI recommended that there should be a uniform withholding tax rate of 15 percent for all payments of profit on debt by omitting below provision inserted through Finance Act, 2020:

    “Provided that the rate shall be 10 percent in cases where the taxpayer furnishes a certificate to the payer of profit that during the tax year yield or profit paid is rupees five hundred thousand rupees or less”, and Circular be withdrawn, to avoid litigation between banks and department.

    For enhanced rate of tax on Additional income from additional investment in Federal Government Securities (Rule 6C of Seventh Schedule), the OICCI recommended Rule 6C of seventh schedule of Income Tax Ordinance, 2001 should be deleted whereby enhanced rate of 37.5 percent is applied on banks income from additional investment in Federal Government Securities.

    According to Rules for person not appearing in Active Taxpayer List (Section 100BA and Tenth Schedule) if a withholding tax agent is satisfied that a person not appearing in Active Taxpayers List (ATL) is not required to file return, then before deducting tax he will furnish to the Commissioner a notice carrying particulars of taxpayer along with reason on the basis of which it is considered that the person is not required to file a return.

    The OICCI recommended to delete the rule as branch managers are not conversant with tax laws. Alternatively, if FBR is satisfied that a person is not required to file return of income, his CNIC/Name should be included in an Exempt Taxpayer List (Similar to ATL) which should be issued periodically.

    The original provision of the Seventh Schedule should be restored where provision for bad debts as per the Prudential Regulations of SBP and supported by an Auditors certificate was allowable as a tax deduction to the banks. Alternatively, threshold for allowing provision for bad debts should be increased to 2 percent of gross advances to corporate customers.

    The rule 9 of the Seventh Schedule of ITO 2001 should be deleted as it is being misused and leading to unnecessary litigation.