KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has called on the government to abolish super tax in the upcoming federal budget for 2017-18.
The suggestion is part of tax proposals that the OICCI – a group of 195 multinationals operating in Pakistan – has submitted for consideration of the government while preparing the next federal budget.
Commenting on the proposals, OICCI President Khalid Mansoor said the chamber in its recommendations focused on accelerating economic growth and foreign direct investment (FDI) in the country.
In a statement, the OICCI said the tax proposals were balanced and aimed at providing a level playing field for investors and enhancing documentation of the economy. It also recommended certain structural and procedural changes to improve the overall tax framework in the country.
The OICCI had formally submitted the tax proposals on February 9, 2017 to the Federal Board of Revenue (FBR).
It suggested that the government should frame such tax policies that led to long-term investment plans and should ensure a period of at least 10 years for phasing out. This way, local and foreign investors will be able to base their plans on policies that are predictable and consistent for a reasonable period of time.
The OICCI was of the view that targets given by the FBR to the Large Taxpayer Units (LTU) should be realistic with research-based growth projections in different business sectors. Similarly, growth in tax collection should be fully quantified by estimating the contribution from broadening the tax base and bringing new taxpayers in the tax net.
For this purpose, the OICCI called for setting up a research and analysis wing at the FBR run by such professionals and experts that could provide sector-based economic and tax projections. The recommendations include reduction in corporate tax rate from 30% to 25% and general sales tax from 17% to 13% in line with rates in the Asian region.
It also sought abolition of 3-4% super tax, rationalisation of minimum tax for large value but low margin businesses like oil marketing companies and revamping of the withholding tax regime from the current 55 rates to only 5 rates.
Published in The Express Tribune, March 17th, 2017.