LAHORE: The Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended a predictable, transparent and consistent tax regime and squeezing tax rate to 0.2 per cent for authorised dealers of local vehicle manufacturers in the federal budget 2021-22.
In its budget proposals, the OICCI — a group of top 200 foreign investors in Pakistan belonging to 35 countries who are major stakeholders in the country’s economy — said tax policies should be for timelines with 10-year phase-out period to facilitate and protect longer term investment plans. In the last two years, the minimum tax rate increased to 1.5pc, tax credit on investment in BMR abolished, the chamber said.
Moreover, there was no action on announced gradual decrease in corporate tax rate to 25pc by 2023, explains the OICCI in its proposals aiming to energise the economy, bring equity into the tax system and lay the foundation for FDI/investment growth in the country.
The OICCI seeks reviewing minimum tax regime by abolishing alternative corporate tax and making general rate of MTR under section 113 of ITO 2001 to 0.5pc only. It should further be reduced to 0.2pc for businesses dealing in sectors with high turnover and low margins. To promote investment in special economic zones, the MTR should not be applicable on companies operating in these zones.
Published in Dawn, April 14th, 2021