ISLAMABAD, Jan 21: The government will soon set up commercial courts for speedy disposal of bank loan cases, replacing the existing banking courts.

Official sources told Dawn here on Tuesday that with the setting up of the commercial courts under the ordinary law, referral of loan cases to the National Accountability Bureau (NAB) would also be stopped. The purpose, they said, was to remove various impediments that were causing problems in attracting the much sought after local and foreign investment.

These commercial courts will be required to dispose of the cases within 45 days including execution for which the law will be amended accordingly.

It has been proposed to the government by a Task Force appointed by the BOI, that no adjournments whether by prosecution or by defence should be allowed in such cases beyond two days.

The prosecution should be bound to present the challan within a week failing which the judge should be able to take action against the prosecution agency. In the event that NAB continues to deal with commercial loan cases, it should carry out investigation using its own staff rather than relying on previous investigations undertaken by other agencies.

Moreover, an action should be taken to appoint a Mothtasib (Ombudsman), given the widespread view amongst investors, particularly small investors, that such an institution is needed.

About the labour and social legislation, it was proposed that the Registrar should, before registration a Trade Union, consult the employer to help him establish that persons who are applying for registration of Trade Union are workmen within the meaning of Industrial Relation Ordinance (IRO), 1969, that they are in the actual employment of the company, and the provisions of IRO 1969 apply to the establishment.

It was also recommended that workers in establishments operating businesses in different industrial categories should not be allowed to be represented by more than one union and Collective Bargaining Agent.

Similarly, payment made to trade union leaders “on eve of conclusion of the settlements or filing of cases” should be properly accounted for and credited. Receipts of written notice of failure of bilateral negotiations or conciliation proceedings should be made a condition precedent for service of a strike notice or initiating a case in the court.

The government body of the Board of Investment (BoI) should look into the problem of rationalising the inspection process.

Small enterprises employing up to say 50 persons should be exempted from the definition of factory used in the EOBI legislation. BOI should add its voice to those arguing for prompt implementation of the report on the consolidation of Labour Laws.

The BOI task force expressed the hope that simplification and modernization of the capacity and status of the labour judiciary will make a significant contribution to improving the investment environment.

About taxation, it was proposed that consideration should be given to having only two classes of corporate taxation, one relating to listed companies and the other to non-listed companies. If a bank is listed, it will be taxable at 33 per cent and, if unlisted at 43 per cent. Further consideration should be given to applying the same rate of tax on top dividend income to domestic and foreign companies. Dividend income received by a public company carrying on an insurance business should not be chargeable at the corporate tax rate.

The insurance companies, it was further proposed, be treated in the same manner as scheduled banks and Modaraba companies. The provision in the Section 80 D which has the effect of taxing companies which are making a loss should be deleted from the Income Tax ordinance, 1979. The government should give consideration to removing anomalies identified in the Income Tax Ordinance 1979 and the deletion from Section 55 of the ad infinitum tax filling amendment. Also the inconsistency in application of Tax Rates should be deleted from the income tax ordinance 1979.