Minister of State and Chairman Federal Board of Investment (BoI), Dr. Miftah Ismail has announced tax exemption for companies planning to invest in Special Economic Zones (SEZs). According to this decision – likely to have a mammoth impact upon the business industry, all local and international companies who invest finances in establishing industries in these zones, can avail this facility.
While addressing a gathering of business professionals at the office of Chamber of Commerce and industry, Dr. Miftah stated that the government is planning to provide some tax rebates to China, under the Pak-China Free Trade Agreement. Some of these measures are certain to boost exports to China which currently amount to a meager PKR 2 billion while imports stand at a staggering figure of PKR 18 billion.
BoI is Restricting Double Taxation and Encouraging Ease of Doing Business
BoI is currently in talks with the Federal government that provinces should not charge double taxation from investors. This will discourage them from investing their money in establishing a business. Additionally, the government is expected to reduce the number of taxes in the upcoming budget. Investors who plan to establish textile units in Pakistan before June 2020 will also be given special tax incentives.
Giving an example of Bangladesh, the Chairman said that their government only takes 60 days to allow a new investor to set up a business including all the utility connections and relevant processes. The same process takes more than 180 days in Pakistan. Thus, it is highly significant for the government to reduce these hindrances in order to attract more local and foreign investors.
On the other hand, Cambodian economy has promised to facilitate the necessary procedures of doing business for Pakistani investors within 2 days.
Quick Read: Effects and influences of the withholding tax
He also shed some light on the China-Pakistan Economic Corridor stating that this project will change the fate of Pakistan’s economy in future. Out of the $52 billion investment, $34 billion have been allocated for just power plants. This reflects upon the special emphasis given to uplift this sector. Overall, 5 power plants will be established in Punjab alone.
Another speaker at the event, FPCCI Regional Chairman and Vice President – Manzoor ul Haq Malik, said that flexible trade policies should be adopted by the government to encourage exports. Adding further, he stated that advanced taxation on imported material should be eliminated and liquidity issues should be resolved.