PBC submits proposals on trade and exports
KARACHI: The Pakistan Business Council (PBC) has submitted proposals to the federal government to promote scale, competitiveness, formalization and investment. Furthermore, the business advocacy body has urged the government to take various measures for export promotion as part of its ‘Make in Pakistan’ push.
In a letter to Federal Finance Minister and Revenue Minister Shaukat Tareen, PBC Director General Ehsan A. Malik said, “Thank you for participating in the PBC’s dialogue on the economy last month, where you suggested an offsite meeting with the PBC to discuss the proposals. promote scale, competitiveness, formalization and investment. We look forward to hearing from you when you want to discuss further. In the context of the PBC’s “Make-in-Pakistan” orientation, we have also included our proposals for export promotion, some of which fall within the domain of your ministry and the rest would be of interest in your role in the cabinet. , EAC and CEC. »
PBC said the group company laws that were enacted in 2007 aimed to consolidate large-scale businesses through the holding company structure. Constant changes to income enhancement laws have compromised the original spirit of the laws.
The relief clause of 103C be reintroduced to encourage the formation of enterprise groups. To distinguish the relief of multiple taxation from the exemption from income tax, it is proposed to insert a new subsection in Article 59B worded as follows: The distribution of dividends within companies eligible for the Group relief under this section is not considered a chargeable event. This is in line with established global practice of protecting intercorporate dividends from multiple taxation.
Under Section 65B of the Income Tax Ordinance, the 10% investment tax credit on new plant and machinery investment for new projects and for BMR has been reduced until June 30, 2019, after which it was removed. The 2019 finance law can be withdrawn and the credit made available at 10% until June 2025 to encourage industrialization and job creation.
July-January trade deficit widens 91.9% year-on-year
Under Section 65C of the Income Tax Ordinance, the tax credit available for new stock exchange listings available until 2022 at the rate of 20% in the year of listing and 10 % for each of the following two years was removed in the Finance Act 2021. It recommended that former Section 65C of the Income Tax Ordinance be reinstated, subject to a minimum free float of 25 % throughout the year for which the tax credit is claimed.
The transfer status of PE and VC funds was withdrawn by the deletion of Section 101 of ITO 2001 in the Finance Act 2021. The PBC recommended that Section 101 of ITO 2001 repealed by the FA 2021 be reinstated with some changes.
Illicit (and unrecorded) trade in all its manifestations has a significant impact on government revenue, sales and profitability in the formal sector and, in many cases, has a detrimental effect on consumer health. He urged the government to engage the private sector in a “win-win” consultation process to thwart the illicit trade by adopting certain measures.
While climate change is a broader challenge, there is no organized effort in the formal sector to promote waste collection, recycling and reuse.
PBC has suggested that the government grant recycling pioneer status to promote formalization and professionalism. Allow duty-free import of equipment and grant a 5-year tax holiday to this industry.
Under Sections 122, 176 of the Income Tax ITO 2001 and Sections 11 and 25 of the STA 1990, audit opinions issued are of a ‘fishing’ nature without specific information. This creates undue hardship for taxpayers. It is recommended that powers to bring proceedings under Section 122(5A) of the Income Tax Order 2001 be withdrawn or only issued with the approval of the IR member. In addition, they must be based on material information.
Neither the FBR nor the PRAs publish data relating to customs valuations and sales tax and excise duties paid by individual entities. There is an incentive not only to under-invoice imports, but also to under-report production and sales. There are several lucrative businesses in service industries (restaurants, cinemas, hospitals, etc.) that are not required to be linked to the RBF POS system. The POS systems of all entities registered with the PRAs must be linked to the FBR POS system.
Copyright Business Recorder, 2022