ISLAMABAD: The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to review the decision on withdrawal of exemptions as it will damage investors’ confidence.
In a letter to Finance Minister, Dr Abdul Hafeez Shaikh, OICCI Secretary General, Abdul Aleem said the members of the OICCI had noted with some concern the contents of the media reported draft Income Tax (Second Amendment) Act 2021.
OICCI, representing the collective view of top 200 foreign investors, has regularly urged the authorities on the need for predictability, consistency, and transparency in policies.
“Abrupt and frequent changes in law damages the confidence of all investors, more so of foreign investors, and changes without proactively engaging with the key stakeholders, like OICCI, should be avoided,” he added.
The initial impression of the OICCI on the proposed amendments is that while certain anomalies being rectified through this proposed legislation are most welcome as they would decrease distortions in the existing tax framework, the potential increase in tax collection from withdrawal of exemptions, like, for example, removal of relief on inter-corporate dividends or withdrawing incentives for listing of companies on PSX, would be insignificant, compared to the “confidence damage”.
“The compliant corporate sector is already taxed heavily, whereas other businesses in the informal economy hardly pay any taxes. If the proposed amendments are approved, the burden on existing taxpayers would further increase,” he continued.
OICCI has requested Finance Minister to review withdrawal of exemptions being contemplated and restrict the proposed amendments to addressing anomalies and lacunas in the Income Tax laws to avoid sending wrong signals to foreign investors.
Copyright Business Recorder, 2021
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