FBR chairman visits OICCI to discuss taxation proposals 2012-2013

KARACHI: The Federal Board of Revenue (FBR) Chairman Mumtaz Haider Rizvi, Shahid Hussain Asad, Member Inland Revenue and other Senior FBR officials met the Managing Committee and members of the Overseas Investors Chamber of Commerce and Industry (OICCI) to discuss Taxation Proposals for the National Budget 2012-2013. 

President of the OICCI, Humayun Bashir in his introduction highlighted the significant contribution of OICCI members in Pakistan’s economic growth by way of massive tax payments and in creating employment opportunities The President OICCI, further informed that the foreign investors operating in Pakistan perceive Government Policies favorably but 79% were critical of policy implementation. This is an improvement over the 2009 survey, when over 86 % of respondent were dissatisfied with policy implementation in the country.

The FBR Chairman expressed surprise at the relatively low level of proposed investment of $3 billion in the 4-5 years by the OICCI members. The President OICCI agreed that considering the country’s potential it should be five times more, but socio-political environment and governance issues are a big challenge.

Explaining the key elements of the Taxation proposals, the OICCI President mentioned that “OICCI members realize their moral duty towards the country and fully pay their tax which amounted to over Rs300 billion by just 100 of the 189 members in 2011."

"OICCI's Budget Proposals are balanced and aim at broadening the tax base, providing incentive to the honest tax payers and above all enhancing the documentation of the economy. The proposals also recommend certain structural and procedural changes to improve the overall taxation framework in the country," Bashir said.

OICCI in its taxation proposals has strongly recommended documentation of the economy without exception and asked for doing away with all exemptions and amnesty of income so that all segment of the society proportionately contribute to the development of the country. In this connection the OICCI strongly supported the idea of CNIC production by unregistered buyers, manufacturers, importers and exporters as per the SRO 191(1)/2012.

OICCI highlighted major concerns of its members especially in the area of smooth implementation of law and sought FBR Chairman’s support and assistance in resolving pending issues on Tax refunds, the high rate of WHT on imports, doing away with Minimum tax and Fixed tax regimes, specially on Oil and large Chemical Companies, sought clarity on tax credits on new investments and recommended uniform tax rate for all businesses and recommended setting up of a strong Research and Analysis wing within FBR for benchmarking various aspects of taxation structure in Pakistan. 

Rizvi candidly responded to all recommendations and acknowledged the positive role played by the foreign investors in the country and encouraged the OICCI members to enhance their activities and investment for the development of the country. He assured the members that FBR will closely look into all the proposals and, after analyzing all aspects, decide on appropriate action on the recommendations of the OICCI.

Rizvi directed FBR officials accompanying him to render all possible help, for quick resolution of all matters especially the matters highlighted in the presentation.

In conclusion, Bashir said that "OICCI is an important stakeholder in the economy of Pakistan. Therefore it is hoped that due consideration will be given to OICCI taxation proposals which are progressive and aim at documenting the economy and putting proportionate share of taxation on all segments of the society. Apart from providing foreign direct investment, employment generation, corporate social spending and other benefits, OICCI members represents perhaps the single largest group of taxpayers in the country. These proposals represent the collective view of 189 foreign investors who are members of the Chamber and are some of the world’s leading multinational companies belonging to 33 countries and operating in 14 sectors of Pakistan economy."