CEO of Pakistan Business Council (PBC), Ehsan A Malik said that the government should revisit the changes made in past few years which have effectively dismantled the policy framework for capital formation. In a letter to Prime Minister Nawaz Sharif, he advocated a "Pakistan First" approach and suggested various steps and reforms required to promote capital formation and investment.
Few of reforms he advised to government are: Restore group tax relief provisions of the Finance Act 2007 and Exempt inter-corporate dividends from cascading tax. Create long-term tax advantage for listing on the stock exchanges. Encourage incorporation and governance by equalizing the rate of tax on SMEs earning up to Rs 20 millions of profit with that applicable to individuals and AOPs.
Withdraw Super Tax and discontinue tax on bonus shares and retained reserves. Restore ability to avail initial allowance on investment in plant and buildings. The ACT tax regime works counter-purpose to this in start-up years when it is most required.
Encourage the ICT sector to create jobs and exports. Adapt incentives presently configured for manufacturing. Set the target growth in broadband penetration from 20 percent to 80 percent in 3 years by reducing taxes.
Domestic industry needs to be nurtured. In a country with a 200 million population, industry has been unable to develop scale. Some of the policy measures required. Encourage declaration, return to investment in Pakistan of assets held abroad by Pakistanis, other than public servants.

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Options to regularize wealth abroad for tax and foreign                One-time Penalty
exchange regulation purposes, whils concurrently               3 months       Following
addressing to concurrently addressing the anomalies         from enactment     3 months
in these regulations to remove ambiguity.
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1. Repatriate via banking channels into Pakistan Rupees           2%                 3%
2. Invest in US$ denominated Pakistan Development   Bonds         3%                 4%
3. Retain abroad, subject to tax on income arising henceforth     4%                 5%
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Make job creation a specific target of CPEC.
Ensure that concessions to CPEC SEZs do not undermine existing industry.
One percent lower tax rate for companies creating 50 or more new jobs on their own payroll.
25 percent rebate in effective tax rate for full time working women with children.
Finished goods should not enjoy lower tariffs than raw materials.
Regulate Afghan Transit Trade to prevent rampant abuse.
Under invoicing and dumping of imported products needs to be stopped.
Sale and transportation of smuggled goods needs to be clamped down upon o Units closed down due to energy shortfall need to be revived.
Accelerate alignment of tax rates with those offered by progressive Asian countries:

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            Corporate Tax Rate   Sales/VAT Rate
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Pakistan     32% (Excl WPPF&WWF)            17%
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Singapore    17%                             7%
Sri Lanka    15%                            12%
Bangladesh   25%                            15%
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Vietnam      22%                            10%
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Robust industry driven technical and vocational training and welfare programmes.
Industries should be allowed to spend a portion of their WWF and undistributed WPPF contributions for setting up and running technical and vocational training institutes.
Firms hiring freshly trained manpower from these institutes should be given a tax rebate for the first year to encourage the hiring of trained manpower.
Industries should be encouraged to help Pakistan meet the UN SDGs through initiatives promoting health, hygiene, gender balance and employment of the handicapped.
Value added exports: Pakistan's exports are not only slipping but they still primarily comprise of commodities which are more vulnerable to recession in export markets as opposed to value added exports, which also generate jobs and earn higher foreign exchange. The specific policy measures required are:
Integrate the Industrial, Trade, Agriculture, Labour and Fiscal policies, for too long the fragmented, unaligned approach of ministries has led to sub-optimal results. A high level body answerable to the PM should target Pakistan to achieve parity with export focused countries like Vietnam and Bangladesh.
Create level playing field for value-added exports, labour and energy costs in Pakistan are more than double those of Bangladesh, India, Sri Lanka and Vietnam. Export incentives should be skewed heavily to value-added exports to make them more competitive.
Export of primary commodities need to be discouraged.
Rebates and refunds need to be automated. The export sector has become a major avenue for the FBR for "window dressing" its inability to collect revenues. Refunds and rebates of the export sector should be linked to export receipts and handled by the banks.
Brand Pakistan should be a private sector led initiative. Private sector should be allowed to lead this initiative with measurable targets and funding from the Export Development Fund.
Broadening of the tax base. In addition to equip the FBR .with technology and trained manpower, some of the specific issues which need attention are:
Transaction tax on non-filers should be revised upwards and used as a means for increasing the tax base, not as another means for the FBR to collect revenue through a withholding agent.
Abolish the "full and final" tax regime, the Presumptive Tax Regime was introduced as a short term measure to document the economy, this should now be withdrawn and all taxpayers be obliged to file returns.
KPIs for FBR need to be changed. FBR's role should be to collect taxes, its involvement in tax policy leads to short term revenue oriented measures at the cost of long term health of the economy. An independent body with representatives from business should recommend tax policies.
Unify taxes, simplify returns and collection systems. With complexity of multiple taxes and agencies, Pakistan stands at 155 of 190 countries in the World Bank/PwC Paying Taxes Ranking.
Perpetual tax amnesty schemes should stop. Foreign remittances under Section 111 (4) should be taxed beyond a certain annual limit.
Encourage formalisation of real estate by reforming the taxes on property transfer to and on distribution of profit by REITs. Additionally, tax policy should differentiate between speculation in plots and development of housing.