KARACHI: Pakistan is on the radar of foreign investors who rate the country positively for investment but there is a dire need for consistent and transparent policies along with affordable taxes, Overseas Investors Chamber of Commerce and Industry (OICCI) President Bruno Olierhoek said on Tuesday.
Talking to journalists at the Overseas Investors Chamber, Mr Olierhoek said that Pakistan – with a consumers market of 220 million people and a GDP growth rate of over 5 per cent – offered great attractions for potential foreign investors.
He stressed that there is a need to explore and attract new investments, adding that many American and European companies are keen to invest.
Pakistan is operating at 25-30pc of its potential, noted Mr Olierhoek. There is a need to drive it to the optimum level by attracting more investment and creating jobs because around two million new job seekers enter the market every year, he added.
The OICCI president noted that it was easy to do business in the informal sector in Pakistan where no taxes are paid. However, there exists an opportunity for the formal sector to make inroads and capture such vast and open markets, he added.
The OICCI chief suggested that the government should make doing business difficult in the informal sector and easy for the formal sector. Only then new investments would come and help reduce the growing role of informal sector in the economy of the country, he stressed.
He further said that Pakistan offers good incentives for foreign investors but despite improvement in security situation the country is not able to attract large foreign direct investment (FDI).
Responding to a question, he said, the main reason for low FDI
in Pakistan was the negative perception about the country which needs to be managed more professionally.
Issues including the World Bank low ranking in the ‘Ease of Doing Business’ survey, issues related to taxation and Intellectual Property Right (IPR) policies need to be addressed too.
He said there is poor coordination between federal and provincial agencies on issues related to food standards, tax rates and Workers Profits Participation Fund (WPPF). He suggested introducing a comprehensive taxation system between the FBR and provincial revenue authorities.
Mr Olierhoek said that the OICCI wants corporate tax rate be reduced to 25pc to attract foreign investment in Pakistan and the government should eliminate 3-4pc super tax as had been committed. Similarly, he said tax on undistributed profit and bonus shares should also be removed.
Published in Dawn, March 14th, 2018