Doing business reforms: BoI panel terms delayed refunds a 'major bottleneck'

The Steering Committee on Doing Business Reforms of the Board of Investment (BoI) has termed delayed refunds as a major bottleneck and recommended Federal Board of Revenue (FBR) to reduce time period for payment of sales tax refunds to business community. Sources told Business Recorder here on Wednesday that the issue of sales tax refunds was discussed during the last meeting of Technical Advisory Group, chaired by Chairman Board of Investment, to identify major bottlenecks in the overall Ease of Doing Business initiative of BoI.
It has been recommended to decrease time to obtain value added tax (VAT) refund from 79 weeks to 20 weeks, another policy decision, will be taken to steering committee. The Federal Board of Revenue (FBR) will fully integrate its website with the relevant provincial counterparts, Securities and Exchange Commission of Pakistan (SECP) and Employees Old-Age Benefits Institution (EOBI) under one window project for enhancing foreign investment.
Sources said that the one widow project was also discussed during the last meeting of Technical Advisory Group. The Securities and Exchange Commission of Pakistan (SECP) and Federal Board of Revenue (FBR) will take measures to facilitate e-payments through mobiles and debit cards.
It was informed that the communication gap between what the government has achieved and the private sector, was a major challenge. Despite the implementation of four major reforms, Pakistan's ranking in the DB 2018 Report slipped by three points to 147. This development has spurred interest at the country's highest political office, enticing the PM to form a steering committee and take stock of the progress that has so far been achieved and the urgent steps that need to be taken in a bid to improve Pakistan's investment climate and its international credit worthiness. Importance of coherent effort in the implementation, monitoring and communication of reforms was stressed on.
Presentations on updates were given by the governments of Punjab and Sindh and Federal Bureau of Revenue; whereas SECP, SBP and K-electric described their progress to the chair.
After detailed deliberation, it was decided that the FBR will expedite the signing of MoU with the government of Punjab with regards to its integration with Punjab Business Portal and merger of STN and NTN will be taken up at the steering committee meeting.
The SECP will resolve the issue of e-payment by making payments by mobile and debit cards, etc. The matter pertaining to integration of two frameworks for corporate and non-corporate sectors to have unified registry will be taken up at the steering committee meeting later this month with the input from State Bank of Pakistan.
K-Electric will share the data of providing connection to SMEs including connections given to warehouses for the last one year and also initiate process to automate processing on line applications for electricity. It will issue a notification in respect of time taken in days (111 days which is less than 120 days proposed) to get an electricity connection in areas where K-Electric is present. The notification will be circulated and posted on K-Electric website as well.
KE claims that in 2016, the average time to get an industrial connection was 178 days, which has now reduced by a promising 30 percent. KE has made astoundingly visible improvements in service delivery with a 24 hours help desk and one window operations in place. Delays in giving away connections are only reported when KE management doesn't have satisfactory information on the consumer.
The BoI suggests that KE must provide some data, preferably by posting it on its website and making it publicly retrievable. KE agrees to share the data of number of applicants that manage to get connected to the grid in 111 days which is less than the days proposed in the plan.
With regards to Trading across Borders, the FBR will implement e-payment solutions mechanism as well as ensure integration of PTA with WeBOC by February 15, 2018.
The BoI will take up the matters with Ministry of National Food Security relating to procurement of computers by its allied departments such as Plant Protection Department, Animal Quarantine Department and Seed Certification Department to expedite their integration with WeBOC.
The BoI will take up the matters relating to appointment of Registrar of Collateral Registry, pursuing passage of Corporate Rehabilitation Act 2017, amendments in Federal Treasury Rules with Finance Division.
For robust communication, the BoI will initiate a process for organizing seminars/workshops in Lahore and Karachi in collaboration with WB Group during February 2018 to apprise contributors of reforms completed/ ongoing and to have identification of gaps between what is reported in DB report and ground realities in each area.
Details of the issues relating to the FBR revealed that the customs have introduced the e-payment solutions with a full implementation slated for the second week of February. The FBR has established communication linkages with the National Tariff Commission, SBP, Credit Development Authority and TDAP.
By April 2018, time taken for certificate of origin will be reduced needed in Trading across Borders indicator as EDI will be operation in real time. The gaps were also identified by Customs on Trading across Borders which will be shared. The bottleneck included for an Integrated Platform of National One Window of Customs has to be done by integration with Port Community system. The merger of STN and NTN was highlighted as a serious bottleneck, and a subject that will be taken up at the steering committee meeting later this month.
The FBR website needs to be integrated with the relevant provincial counterparts and with SECP and EOBI for being the single one window. Approval of change was proposed in Federal Treasury Rules & Accounting Polices & Procedures by Finance Division.
Decrease time to obtain VAT refund from 79 weeks to 20 weeks, another policy decision, will be taken to steering committee. The issues of Securities and Exchange Commission of Pakistan revealed that the Commission is required to reduce time now taken to register the chief executive officer of a corporate entity.
Bottleneck included that the SECP claims that they register 80 percent of the applications they get in one day; however the contributors have been reporting contradictory stories. This was flagged as a serious bottleneck. The SECP portal is linked with the FBR and their facilitation centers are fully functional in Karachi, Lahore and Islamabad yet integration is the issue at hand.