Home / Finance & Market / Overseas investors demand one window tax collection

Overseas investors demand one window tax collection

Published on 21st Apr, Edition 16, 2014

 

The overseas investors getting upset to deal with various agencies responsible for tax collection have urged upon the government to integrate all revenue collections under one ministry to improve doing business environment.

Overseas Investors Chamber of Commerce and Industry (OICCI) the representative body of the overseas investors in Pakistan, however, has extended its support to the Sindh government in its efforts to increase revenue collection and streamline the taxation structure of the province so that all segment of the society including those engaged in agriculture make due contribution to the development of the province.

In an interactive session with Mr. Tashfeen Khalid Niaz, Chairman Sindh Revenue Board (SRB) and Mushtaque Kazmi, Advisor on Taxes to discuss OICCI’s 2014-15 Taxation Proposals for Sindh, Asad S. Jafar, President OICCI, commenting on the role of the provincial governments in revenue collection after the 18th amendment stressed the need for SRB and major stakeholders like OICCI whose members contribute over Rs700 billion annually to the Federal and Provincial revenue, to remain closely engaged. He added that the OICCI proposals for the Sindh Fiscal Budget 2014-15 highlights some restructuring measures to facilitate investment and economic activity besides suggestions for broadening the tax base and review of the basis of taxation for agricultural income.

Mr M. Abdul Aleem, CE/Secretary General OICCI, invited SRB Chairman’s attention to fast deteriorating position of Pakistan in the World Bank’s Ease of Doing Business (EODB) Index. Pakistan has sharply slipped from being 75th in place in 2010 to 110th in 2014, which has considerable negative implications in attracting FDI in the country. One of the key irritant in EODB has been the complications on paying taxes, including provincial and local taxes.

OICCI’s 2014-15 taxation proposals to the Sindh Government include integration of current three revenue collection agencies into one, taxing all incomes including agriculture activities related income, full coordination between all the provincial revenue boards to clearly identify jurisdictional issues, which are creating problems for tax payers, reduction and uniformity in sales tax rates for all kinds of business activities, need for clarity in scope of taxable services, exemption for withholding agents from deducting sales tax from unregistered vendors, introduction of zero-rating regime for certain business transactions including those impacting the pharmaceutical sector, which is not covered in the federal sales tax ambit and deletion of toll manufacturing from the list of services, which are subject to provincial tax levy as toll manufacturing is part of Federal Sales Tax Acct.

Chairman SRB, Mr Tashfeen Khalid Niaz lauded the role of OICCI members who collectively contribute over one-third revenue collections in Pakistan. He also appreciated the fact that OICCI was the first and, so far, the only body to have submitted tax proposals for consideration in the next Sindh Budget for fiscal year 2014-15., and commended the investments being made by OICCI members. He also informed the participants about the significant contribution of SRB to the enhancement and efficiency of tax collection, which was a benchmark in Pakistan.  He invited all members to come to the SRB for any issues and promised that SRB will immediately look into the matter for a possible solution. The Chairman addressed all the main proposals presented by Mr M. Abdul Aleem and promised to consider these proposals from various aspects to determine which proposals could be considered in the next Sindh Budget.

On a question, the Chairman informed that 99 percent of SRB tax collections of Rs42 billion in the last fiscal year was from Karachi. Later, the Chairman made an announcement that the Sindh Revenue Board, with the approval of the Government of Sindh, is issuing a notification exempting the whole of the amount of penalty and 95 percent of the amount of default surcharge, payable on the principal amount of arrears of the tax as are outstanding on the date of this notification, if the said principal amount of tax and the 5 percent of the amount of default surcharge are paid before the 30th day of April, 2014, and the tax returns or the revised tax returns, are also e-filed in the prescribed manner by the 9th day of May, 2014.

The Overseas Investors Chamber of Commerce and Industry (OICCI), a business chamber representing nearly 200 multi-national companies operating in Pakistan, is a very important stakeholder and contributor to the economy of the country. These member companies, whose major shareholders are from 35 different countries of the world, operate in 14 major business sectors of the country, including the financial services, oil, gas, energy, pharmaceuticals, chemicals, fertilizers, pesticides, cement, food, consumer goods, engineering, trading and others. 57 of the OICCI members are listed on the Stock Exchanges of Pakistan and 46 members are associates of the 500 largest companies of the world listed by the Fortune magazine in 2013.

Check Also

Subdued performance of auto sector

  Pakistan Automotive Manufacturers’ Association (PAMA) has released its monthly sales data for the month …

Improving revenue collection

  Even a cursory look at the development of Singapore shows that the country has …

Leave a Reply

Your email address will not be published. Required fields are marked *