KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted taxation proposals for the annual federal budget 2017-18; calling for cut in corporate tax rate to 25% from 30% and general sales tax rate from 17% to 13% in line with the rates in Asian region.
It also demanded that 3% to 4% super tax be abolished as well, says OICCI statement here on Thursday. Commenting on the OICCI taxation proposals, its President, Khalid Mansoor said these budget proposals represented the collective recommendations of foreign investors. These were focused on accelerating economic growth and foreign direct investment (FDI) inflow in the country.
He said OICCI’s comprehensive proposals were balanced and aimed at providing a level-playing field to investors and to enhance the documentation of the economy besides recommending certain structural
and procedural changes to improve the overall taxation framework in the country. The OICCI recommends that the government should ensure at least ten year phasing out period so that local and foreign investors could base their plans on the tax policies.
Overseas Chamber stresses that the targets given by the Federal Board of Revenue (FBR) large tax-payers units (LTUs) should be realistic on research based growth projections in different business
sectors.
Similarly, it said, growth in tax collections, over and above the projected economic growth, should be fully quantified by estimating the contribution from broadening the tax base. For this purpose, OICCI recommended formation of a research and analysis wing at FBR resourced with high caliber rofessionals and experts to provide sector based economic and taxation projections.
President OICCI emphasized that the tax reforms commission 2016 report be judicially and transparently implemented with periodical monitoring of overall impact on improved tax administration, tax payee’s orale and motivation besides substantially increasing the number of tax filers, revenue collection and tax-to-GDP ratio.
Other main points included : rationalize minimum tax (MTR) regime for large value but low margin businesses like oil marketing companies–revamping and massive simplification of withholding tax regime from current 55 rates to only 5 rates — incentives for new investments in manufacturing and employment generating ventures to be made part of every budget–group taxation relief to be re-introduced–Workers Welfare Fund (WWF) and Workers Profit Participation Fund (WPPF) jurisdiction and tax deductibility be clarified, especially after the promulgation of similar legislation in the provinces.
Coordination between Federal and Provincial Legislation should be improved as foreign investors had invested in Pakistan and not in any particular province– pending income/ sales tax refunds be settled within a month.
