Pakistan has launched probe into alleged tax evasion by international beverage companies including Pepsi and Coca Cola operating in the country.
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Prime minister welcomes Pepsico’s investment plans
ISLAMABAD: Prime Minister Imran Khan has appreciated PepsiCo proposed future investment plans in Pakistan.
CEO Pepsi Africa, Middle East & South Asia Eugene Willemsen called on Prime Minister Imran Khan in Islamabad on Wednesday.
Prime Minister Imran Khan appreciated the existing business venture of Pepsico as well as its proposed future investment plans in Pakistan.
The prime minister observed that the investment friendly policies of the present Government offer immense opportunities for foreign investors to expand their business in diverse fields.
The prime minister welcomed the commitment of Pepsico towards social development of Pakistan and said that the Government would extend all possible facilitation to the Company for expansion of its business, including in the agriculture sector.
Prime Minister Imran Khan also discussed with the Eugene Willemsen the possibility of development of the dairy sector of Pakistan owing to huge potential of the country in the dairy sector.
Adviser to PM Abdul Razak Dawood and Chairman BOI Syed Zubair Haider Gilani were also present during the meeting.
Eugene Willemsen apprised the Prime Minister of Pepscico’s existing investment portfolio in Pakistan employing around 60000 individuals directly as well as indirectly, and a network of approximately 700000 retailers across the country who rely on Pepsico products to make a living.
Willemsen informed that Pepsico is amongst the highest taxpayers in Pakistan.
Highlighting the recent investments, including the successful inauguration of a new snacks plant in Multan, the CEO said that the Company has made investment to increase the capacity of its bottling plants and expanded its retail, distribution networks that have increased the number of jobs, generated additional economic activity and increased revenue for the Government.
Sharing Pespsico’s commitment to the social development of Pakistan through various social projects, Willemsen expressed willingness to bring projects aimed at enhancing employment opportunities for Pakistan’s talented youth.
Eugene Willemsen especially expressed his interest in the development of potato crop in Pakistan through efficient irrigation system, and water conservation.
While recalling Queen Maxima of Netherlands’ visit to Pakistan last year, the CEO also highlighted the company’s efforts for women empowerment and their financial inclusion aimed at uplift of society and growth in the country.
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Any duty increase on beverages to result in industry closure: Siraj Teli
KARACHI: Siraj Kassem Teli, director of Pakistan Beverage Limited (Pepso Co. franchisee), while using platform of Karachi Chamber of Commerce and Industry (KCCI) raised voice against government’s proposed plan for implementing excise duty on beverage industry.
Teli, who is also chairman of Businessmen Group (BMG) and former President of KCCI, warned the government against hike in duty on beverage industry and said that any such action would lead not only to closure of the industry but also resulted in mass unemployment.
In a letter sent to Prime Minister Imran Khan, while referring to the ongoing buzz in the media and government circles about additional and new taxes including health tax and water surcharge being imposed in the next budget on beverage industry, he stated that this industry is already paying Rs100 billion to the national exchequer by way of output tax through FED and Sales Tax while the net revenue collection by the government comes to around Rs60 billion per annum which is apart from income tax, with-holding taxes, super tax and other provincial taxes.
He pointed out that over the years, beverage industry and its products have become a necessity of life as many Pakistanis do not have access to pure drinking water and this industry is providing them safe water and other beverages produced with state of the art machinery by strictly following global hygienic standards.
“We understand that the country is in dire need of additional revenue but one should realize that this new revenue must come from new sources and even if it is taken from old sources then it needs to be justified according to their capacity to pay otherwise it may jeopardize the existing revenue”, Siraj Teli stressed, adding that the Beverage Industry is already heavily taxed and if more burden is put on the industry, its growth, which is already in a declining mode in the first quarter, may suffer more.
He said that the cost of doing business has already gone up due to other import/ regulatory duties and upsurge in dollar rate etc. while as this industry produces consumer products, more burden will be passed on to the consumers.
Chairman BMG cautioned that there is a high chance that the imposition of new taxes may lead to closure of the industry resulting in jobs losses of hundreds of thousands of people across Pakistan, besides hampering Prime Minister’s efforts to bring more foreign investment to Pakistan because of such anti-business measures.
He elaborated that this is an industry where supply side of economics should follow where more revenue is generated with growth, wherein taxes are reduced along with consumer prices that would lead to quantum growth and appreciation in net revenue as well. Any proposal to increase taxes will reverse the growth and it would start declining, ultimately reducing the revenue already being achieved from the Beverage Industry and above all high taxes are incentive for evasion, he added.
Siraj Teli was of the opinion that today’s policy is actually shrinking the economy whereas the Government should have imposed a complete ban for one or two years on luxury items such as cars etc. and on those items which are being manufactured in Pakistan along with such food items without which we can survive.
“Also controlling inflation by increasing interest rates has a negative impact on new investment and industry. The solution lies in more industrialization only”, he added.
He said, “We at Pakistan Beverage Ltd. are in this business since the inception of Pakistan and are the highest tax payer in the Beverage and Food Industry for the last 40 years.
“We believe in a prosperous Pakistan, we believe in paying due taxes and we are there to help and support your initiatives.
“However, unjustified and excessive taxation will result in closure of the industry and put a significant dent in the existing revenue that is being collected by the government.
“This will also result in reduction of employment of hundreds of thousands of job across Pakistan in the industry along with the allied retail businesses.”